Author Archives: fsheen

Q-2 Moving Toward the Post-Covid Financial World

The economic fall-out caused by government reaction and over-reaction to the Coronavirus continued to unravel this past quarter, with more changes and uncertainty sure to come. The DJIA closed at 26,075 July 10, up for the week but still down 3,476 points from its 29,551 high on Feb. 12, 2020.  Massive government and central bank intervention have artificially morphed the market and moved into unexplored territory.  Market analysts have no grid system for predicting what will happen next in this new precarious environment.  People often buy gold and silver to protect themselves in times of uncertainty and these commodity values have also risen.  As of Friday afternoon, July 17 gold was $1,811 per ounce, nearing it’s all-time high of just over $1,900 in 2011.  Silver also rose, closing the week out at $19.02 per ounce.

Goldbugs Take Center Stage in Markets, but the Real Show Is With Energy (7.10.20) WSJ https://www.wsj.com/articles/goldbugs-take-center-stage-in-markets-but-the-real-show-is-with-energy-11594373400?mod=hp_lista_pos4

 

Central Banks & Currency

In the first quarter and beginning of the second, the Federal Reserve and most central banks of the world attempted to curb the worldwide shutdown by lowering interest rates and injecting massive amounts of currency into the economy and banking systems in an effort to keep them afloat, as the world shut down.  It is doubtful that they can do much more, having already used up most everything at their disposal. With most interest rates at 0 and having printed trillions of dollars, Treasury & Finance Directors are taking the lead to map out the next steps.

There are signs of major change coming to the US financial system, as at the end of March 2020, President Trump and the U.S. Treasury took steps effectively bringing the FED under U.S. Treasury control.  The articles and links below describe how the current administration has achieved this, and the potential future ramifications of such actions, possibly even including the ultimate elimination of the Federal Reserve.  Purportedly at the order of the US Treasury Department, the WSJ also reported in March, that the Federal Reserve hired Blackrock, the largest finance manager in the nation, to purchase tens of billions of government bonds to help address the COVID crisis:

The Federal Reserve Bank of New York said Monday that starting Tuesday one of its emergency market support facilities will begin buying corporate-bond exchange-traded funds, in a notable expansion of the central bank’s efforts to support the economy and financial system in the coronavirus crisis.”

As early as July of 2018 CNBC reported that Trump was going to take control of the FED, noting 6 out of 7 members of the FED board were soon to be Trump appointments, they said: “The president can and will take control of the Fed. It may be recalled when the law was written creating the Federal Reserve the secretary of the Treasury was designated as the head of the Federal Reserve. We are going to return to that era.”

Trump Poised to Take Control of the Federal Reserve (2018 Article) (7.20.18) CNBC

https://www.cnbc.com/2018/07/20/trump-poised-to-take-control-of-the-federal-reserve.html

Is Trump Destroying the Fed 3002 – Bill Still Report (3.30.20) https://youtu.be/_ZLVxsZTYLc

Trump Taking Control of the Federal Reserve (5.15.20) https://www.youtube.com/watch?v=TXReHK1NqBo&feature=emb_logo

US Treasury in Full Control Time for Constitutionally Sound, Gold Backed Currency

finance.yahoo.com/news/feds-cure-risks-being-worse-110052807.html

The Federal Reserve & The Treasury Just Merged into a Single Organization (3.30.20) https://www.investmentwatchblog.com/the-federal-reserve-the-treasury-just-merged-into-a-single-organization/

Federal Reserve Taps BlackRock to Purchase Bonds for the Government (3.24.20) WSJ https://www.wsj.com/articles/federal-reserve-taps-blackrock-to-purchase-bonds-for-the-government-11585085843?mod=searchresults&page=1&pos=4

NY Fed Says It Will Start Buying ETFs (5.11.20) WSJ https://www.wsj.com/articles/ny-fed-says-it-will-start-buying-etfs-11589247736

Infinite Money Printing Fed Now Buying EFTs (5.12.20) SMC https://www.sovereignman.com/trends/infinite-money-printing-fed-now-buying-etfs-27769/

The Independent UK News reported, “The Bank of England has agreed to expand the overdraft facility it offers the government, amid concerns about potential strains in the state debt market brought on by the Covid-19 emergency. The Bank and the Treasury announced on Thursday morning that its long-standing Ways and Means (W&M) facility will be extended to enable the government to borrow as much as it needs to meet its commitments.”  China’s central bank also recently injected 100 billion yuan ($14.1 billion) liquidity into the banking system via its medium-term lending facility. China has also began utilizing a national digital currency and the U.S. may soon follow; according to Forbes, “On June 30th, 2020, the Senate Banking Committee held a hearing on the future of the digital dollar. The pressures to create a digital USD are mounting as China recently began testing its own digital currency – the DCEP, which will be included in popular applications like WeChat and AliPay.” News.Bitcoin.com also reported that “Visa International has filed for a cryptocurrency system patent that is meant to replace physical currency. The system, which utilizes both central banks and commercial banks, leverages a private blockchain to improve the payment ecosystem.”

Visa Files Patent for Cryptocurrency System to Replace Cash (5.15.20) https://news.bitcoin.com/visa-cryptocurrency-system/

China’s PBOC Injects CNY100 Bln Into Banking System Via MLF (5.14.20) WSJ

http://www.wsj.com/articles/china-s-pboc-injects-cny100-bln-into-banking-system-via-mlf-151589508896

US Moves Closer to Digital Dollar (7.1.20) Forbes

https://www.forbes.com/sites/tatianakoffman/2020/07/01/senate-moves-closer-to-digital-dollar/#fe95ef372797

 

Debt & Recession

In the second quarter, most U.S citizens received $1,200.00 stimulus checks, small businesses received both forgivable and low-interest rate loans, and large businesses received subsidies to help make ends meet during the shutdown.  Reportedly more stimulus is planned and waiting in the bullpen if needed.  Bloomberg wrote, “South Africa made it clear it wasn’t seeking any type of debt suspension to fight the coronavirus pandemic, with such measures likely hurting more than they would help due to the high domestic ownership of securities. … There are a few countries, such as Egypt and South Africa, that aren’t among those seeking to be involved in debt standstill … South Africa is borrowing from domestic capital markets. As of mid-June, 31 countries, including 22 in sub-Saharan Africa, have applied to the Paris Club of official creditors.”  The WSJ reported that “Argentina defaulted on its sovereign debt for the ninth time in history, as Latin America’s third-biggest economy grapples with a new cycle of economic contraction, runaway inflation and a hard-currency squeeze exacerbated by the coronavirus pandemic.”

In a May 16, article the WSJ also reported that “Japan’s economy fell into a recession… The world’s third-largest economy after the U.S. and China shrank an annualized 3.4% in the January-March period, pushed down by the initial effects of the coronavirus pandemic. That followed a revised 7.3% contraction in the previous quarter that was triggered by an increase in the national sales tax. Two straight quarters of contraction is one definition of a recession.  “The situation has become even more severe in April and May after a state of emergency was issued,” Economy Minister Yasutoshi Nishimura said Monday, “The economy is expected to shrink substantially for the time being.”

Simon Black reported, “Total US National Debt surpassed $25 trillion on May 5.  That is a whopping 117% of the USA’s Gross Domestic Product. The debt has only been higher, as a percentage of GDP, just after World War II.  But we’re just at the very beginning of World War Covid-19– or rather, the economic devastation caused by the government response to the pandemic. So just wait, because we’ll see $30 trillion soon.”  Click here to see the Treasury’s numbers. 

Debt to the Penny: https://treasurydirect.gov/govt/reports/pd/pd_debttothepenny.htm

South Africa Avoiding Debt Plan Zambia Joins: Africa Debt  (6.15.20) Bloomberg  https://www.bloomberg.com/news/articles/2020-06-15/south-africa-avoiding-debt-plan-zambia-joins-africa-debt-watch

Argentina Defaults on Sovereign Debt (5.22.20) WSJ

https://www.wsj.com/articles/argentina-moves-closer-to-sovereign-debt-default-amid-coronavirus-crisis-11590160035

Japan’s Economy Fell Into Recession in First Quarter of 2020 (5.19.20) WSJ

https://www.wsj.com/articles/japans-economy-falls-into-recession-in-first-quarter-of-2020-11589760760?mod=hp_major_pos2#cxrecs_s

National Debt Hits $25 Trillion Without Fanfare & Who Holds It (5.15.20) Simon Black https://www.sovereignman.com/trends/another-week-another-governor-with-a-god-complex-27772/

Pandemic Bills Are So Big That Only Money-Printing Can Pay Them (5.15.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-05-15/pandemic-bills-are-so-big-that-only-money-printing-can-pay-them

Powell Warns of a Possible Sustained Recession From Pandemic (5.13.20) AP https://apnews.com/5d02177563bdb72236966a13299c0b67

Public Pension-Fund Losses Set Record in First Quarter (5.11.20) WSJ

https://www.wsj.com/articles/public-pension-fund-losses-set-record-in-first-quarter-11589240175?mod=hp_lead_pos5

Mnuchin Says Treasury Ready to Provide More Money, Take More Risk in Fed Lending Programs (5.19.20) WSJ https://www.wsj.com/articles/powell-mnuchin-set-to-face-lawmakers-over-crisis-lending-programs-11589880602?mod=hp_lead_pos1

EU Plans $2 Trillion Virus Response Effort (5.27.20) WSJ

https://www.wsj.com/articles/european-union-sets-out-major-coronavirus-recovery-plan-11590579779

 

World Economies

During the first two months of the second quarter, the majority of the world was closed for business.  At the end of May/beginning of June, it began to reopen.  Unfortunately, many businesses did not reopen and many more as of mid-July are going bankrupt.  The rescue package enacted by Congress also created additional bankruptcy options, as the loan packages weren’t enough to make ends meet, and bankruptcy rates have soared 26%.  Bloomberg reported that “The hardest hit, however, are selling off assets and closing for good.  They include plenty of big, iconic names. Hertz and J.C. Penney and now Brooks Brothers, too. The vast bulk, though, are small and medium-sized businesses scattered across the country.” Most people haven’t begun to feel the effects of this, as their 22 weeks of unemployment payments and the extension of those benefits won’t cease until the end of the year.  Economists and market analysts are at a loss because the basic framework for predicting what will happen next no longer exists.

Bankruptcy is Better Option for Small Businesses With New Law (7.11.20) WSJ

https://www.wsj.com/articles/burger-chain-turns-pioneer-for-new-small-business-bankruptcy-law-11594459800

Coronavirus Bankruptcies How Covid-19 Is Impacting Business (7.9.20) Bloomberg

https://www.bloomberg.com/graphics/2020-us-bankruptcies-coronavirus/?ll_push_args={%22utm_source%22:%22push%22,%22utm_medium%22:%22notification%22}

Chapter 11 Business Bankruptcies Rose 26% in First Half (7.2.20) WSJ

https://www.wsj.com/articles/chapter-11-business-bankruptcies-rose-26-in-first-half-of-2020-11593722250

After record losses, May and June brought a greater than expected increase in jobs and a decrease in unemployment in the US.  While increased testing has resulted in increased numbers of COVID cases, COVID deaths continue to decrease, so much so that the CDC is considering dropping Covid-19 from Pandemic status to Epidemic status.  The Blaze reported, “The U.S. economy continued its strong bounce-back by adding 4.8 million jobs in June, but some are warning that the numbers don’t reflect a potential downturn due to the recent surge in the coronavirus cases.  The nearly 5 million jobs added in June make it the second consecutive month of gains after more than 20 million jobs were lost in April alone due to widespread COVID-19 shutdowns. The unemployment rate also dropped to 11.1%, down from its high of 14.7% in April.” President Trump has made it very clear he will not shut down the country again if a second wave hits; we will take additional precautions, but we will not shut down the economy.

Jobs Growth Picks Up, but Coronavirus Spike Could Slow Recovery (7.3.20) WSJ

https://www.wsj.com/articles/june-jobs-report-coronavirus-2020-11593651420

US Economy Shatters Expectations with 4.8 Million Jobs Added in June (7.2.20) The  Blaze https://www.theblaze.com/news/economy-5-million-jobs-june?utm_source=theblaze-breaking&utm_medium=email&utm_campaign=20200702Trending-HarvardGradFired&utm_term=ACTIVE%20LIST%20-%20TheBlaze%20Breaking%20News

Mays US Jobs Rebound Was Widespread (6.20.20) WSJ https://www.wsj.com/articles/mays-u-s-jobs-rebound-was-widespread-11592603360

Kudlow Says U.S. Economy Won’t Shut Down Despite Surge in Virus (6.25.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-06-25/kudlow-says-u-s-economy-won-t-shut-down-despite-surge-in-virus

Over the last four years, a majority of world nations have moved closer to nationalism than globalism.  The Covid-19 crisis has pushed many additional countries down that path, with the closing of borders and renewed focus on internal economic survival and their own citizens. Global markets have experienced widespread freefall, but U.S. markets have recovered 70% of what they lost as of mid-July.  The EU is a mess, never really recovering from the 2008 economic crisis and still printing 1.5 trillion euros annually, with negative .4% interest rates. Germany is also in a full-fledged recession.

IMF Downgrades, Pandemic Tightens Grip, U.S. Tariffs: Eco Day (6.24.20)

https://www.bloomberg.com/news/articles/2020-06-24/imf-downgrades-pandemic-tightens-grip-u-s-tariffs-eco-day

Protectionism Spreads Globally With the New Coronavirus (5.29.20) https://www.wsj.com/articles/protectionism-spreads-globally-with-the-new-coronavirus-11590779442?mod=hp_lista_pos2

East EU Heads Toward Worst Economic Slump Since Communism (5.15.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-05-14/eastern-eu-tumbles-toward-worst-economic-slump-since-communism

Germany Plunges Into Recession With Biggest Slump in Decade (5.14.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-05-15/germany-enters-historic-recession-with-biggest-slump-in-a-decade

Coronavirus Lockdowns Trigger Record Drop in Retail Sales, Factory Output (5.15.20) WSJ https://www.wsj.com/articles/coronavirus-lockdowns-trigger-record-spending-drops-on-shopping-eating-out-11589535000?mod=hp_lead_pos1

Extreme Behavior Is on Display Everywhere in the Stock Market (5.19.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-05-19/extreme-behavior-is-on-display-everywhere-in-the-stock-market

 

Political Uncertainty

The COVID Crisis has rearranged the international political/economic map.  It has strengthened and re-established some relations while changing and shifting others.  The biggest changes and those of greatest concern are those in and relating to China.  Over the last six months, China has gone from a favored position in the eyes of most of the world to one of suspicion and mistrust.  Most believe China bears some fault for the Covid-19 and its impact, with these sentiments ranging from purposeful malice to negligence.  Most believe China, at very least, was dishonest about the extent of the problem and waited too long to address the situation and share information, which allowed it to spread to the rest of the world and cause far more deaths than if China had been truthful about the virus upfront.  The U.S. withdrew from the World Health Organization (WHO), due to their initial support of China and their handling of the COVID crisis, however, even the WHO admitted to this mishandling in the first week of July.  In addition to COVID, China’s actions in Hong Kong, the South China Sea, their attack upon unarmed Indian troops, the selling of bodily organs taken from dissidents, their brutal crackdown on Chinese people of all religious faiths, and continued efforts to spy on and steal intellectual property and confidential information from the rest of the world has made them villains in the eyes of the global community.  The Epoch times summed it up this way:

“Exploitation, infiltration, and espionage are all recurring themes. The CCP employs all of them to varying degrees simultaneously in multiple sectors of society in order to undermine or influence the United States—its main impediment to global domination … The Thousand Talents Plan, one of the more widely known CCP talent recruitment or “brain gain” programs, encourages theft of intellectual property from U.S. institutions, according to the FBI.    Walter Lohman, director of The Heritage Foundation’s Asian Studies Center, said the United States has treated China’s “sensitivities” carefully, yet has received “nothing in return.”  “China’s aggressive behavior over the last 15 years or so has only gotten worse, despite our best efforts,” he told The Epoch Times.”

With U.S. Backing, U.N. Confronts Tehran Over Nuclear Work (7.15.20) WSJ

https://www.wsj.com/articles/with-u-s-backing-u-n-confronts-tehran-over-nuclear-work-11594820189

U.S. Denounces China’s Claims to South China Sea as Unlawful (7.13.20) Bloomberg https://www.bloomberg.com/news/articles/2020-07-13/u-s-denounces-china-s-claims-to-south-china-sea-as-unlawful?srnd=premium

U.S. Set to Reject Certain Chinese Maritime Claims in South China Sea ((7.13.20) WSJ

https://www.wsj.com/articles/u-s-set-to-reject-certain-chinese-maritime-claims-in-south-china-sea-11594661229

Communist China Using Unrestricted Warfare (7.9.20) Epoch Times https://ifapray.org/blog/communist-china-using-unrestricted-warfare/

U.S. Lawmaker Seeks to Ban Chinese Firms From U.S. Capital Markets (7.1.20) Reuters https://www.reuters.com/article/us-usa-china/u-s-lawmaker-seeks-to-ban-chinese-firms-from-u-s-capital-markets-idUSKBN242704

WHO Admits China Never Reported the Existence of Coronavirus Outbreak (7.2.20)

https://www.washingtonexaminer.com/news/who-admits-china-never-reported-the-existence-of-coronavirus-outbreak

Trump to Pull U.S. From WHO, Roll Back Special Policies for Hong Kong (5.29.20) https://www.wsj.com/articles/u-s-to-cancel-visas-for-some-chinese-graduate-students-11590744602?mod=hp_lead_pos1

Local Elections Deliver Blow to France’s Macron (6.28.20) WSJ

https://www.wsj.com/articles/local-elections-deliver-blow-to-frances-macron-11593375272

China Threatens U.S. Space Power by Completing Satellite Network (6.23.20)

https://www.bloomberg.com/news/articles/2020-06-23/china-threatens-u-s-space-power-by-completing-satellite-network

Indian People Demand Government Take Revenge on China After Photographs Emerge of Spiked Club Used In Clash (6.18.20) https://news.yahoo.com/picture-emerges-spiked-weapon-used-114452424.html

China Faces Angry World Seeking Virus Answers at Key WHO Meeting (5.16.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-05-16/china-faces-angry-world-seeking-virus-answers-at-key-who-meeting

Senate Bill Could Force Chinese Companies to Drop U.S. Listings (5.20.20) WSJ https://www.wsj.com/articles/chinese-companies-could-be-forced-to-give-up-u-s-listings-under-senate-bill-11590015423

Pandemic Shatters World Order, Sowing Anger and Mistrust (5.17.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-05-17/pandemic-shatters-world-order-sowing-anger-and-mistrust-in-wake?srnd=premium

Tik Tok Bans Due to Chinese Espionage & Theft https://www.youtube.com/watch?v=I_fyz5rOwFc&feature=youtu.be

 

Second Wave

It is unlikely that most people, governments, and markets will react with the same level of concern and compliance as they did during the first wave.  The sting of recent experience will temper the actions taken in potential future waves.  We will go into a next wave with eyes open and much better educated and experienced.  It is common knowledge that COVID mortality rates and facts were inflated and misrepresented by ‘experts’ to support specific agendas. The CDC, John Hopkins, and even WHO have all had to retract and/or adjust their ‘facts’ statements and predictions. While those possessed by certain ideologies will react exactly the same, those utilizing common sense will consider what was learned during the first wave.

What do we know now that we didn’t know the first time around? We know that eight states, as well as a number of nations including Sweden and Netherlands, did not close down and their COVID cases and deaths were no greater than those that did.  We also know that COVID isn’t spread by touching surfaces. President Trump has said, “we are not closing our country if the U.S. is hit by a second wave of coronavirus infections … “People say that’s a very distinct possibility, it’s standard … We are going to put out the fires. We’re not going to close the country… Whether it is an ember or a flame, we are going to put it out. But we are not closing our country.” Many governors and big city mayors have echoed his sentiments. Other Governors and mayors, who don’t agree, like those in New York, California, LA, Seattle, Minneapolis and Michigan, are in a difficult position, having supported the massive demonstrations that have occurred and are still occurring in their states and cities.

 

The number cases are going up with increased testing, but as with every other virus historically, the virulence and severity of the virus are weakening.  The Blaze reported, “The coronavirus morality rate in the United States has dropped so low that the Centers for Disease Control and Prevention may soon stop calling the virus an “epidemic.”  The agency explained last Friday that the COVID-19 mortality rate has dropped so low that the percentage is currently at the epidemic threshold. Based on death certificate data, the percentage of deaths attributed to pneumonia, influenza or COVID-19 (PIC) decreased from 9.0% during week 25 to 5.9% during week 26, representing the tenth week of a declining percentage of deaths due to PIC.”

 

CDC Might Stop Calling COVID an Epidemic Because of Major Drop in Mortality Rate Pretty Telling (7.7.20) https://www.theblaze.com/news/cdc-stop-calling-covid-epidemic?utm_source=theblaze-breaking&utm_medium=email&utm_campaign=20200707Trending-HorowitzNYNJTXAZ&utm_term=ACTIVE%20LIST%20-%20TheBlaze%20Breaking%20News

U.S. Hits Three Million Confirmed Virus Cases (7.8.20) WSJ

https://www.wsj.com/articles/new-coronavirus-cases-hit-daily-record-in-u-s-with-60-000-11594198110

Australia Records Largest Spike in Covid-19 Cases Since April (6.25.20)

https://www.bloomberg.com/news/articles/2020-06-25/australia-records-largest-spike-in-covid-19-cases-since-april

Market Jitters Over Second Covid-19 Wave Are an Overdue Pullback (6.15.20) Reuters

https://www.reuters.com/article/us-health-coronavirus-markets-analysts-v/analysts-view-market-jitters-over-second-covid-19-wave-are-an-overdue-pullback-idUSKBN23M0PQ

Trump Says he Won’t Close the Country if Second Wave of Coronavirus Hits (5.21.20) CNBC

https://www.cnbc.com/2020/05/21/trump-says-he-wont-close-the-country-if-second-wave-of-coronavirus-hits.html

 

A Post COVID World

In the U.S., President Trump and Education Secretary Betsy DeVos have announced that federal funding may be cut for schools that do not fully reopen come the start of the school year this fall. Trump tweeted: “In Germany, Denmark, Norway, Sweden and many other countries, SCHOOLS ARE OPEN WITH NO PROBLEMS. The Dems think it would be bad for them politically if U.S. schools open before the November Election, but it is important for the children & families.”  The WSJ wrote, “Fears of a resurgence of the novel coronavirus are dominating the news and spooking financial markets. The flare-ups bear watching, and preparing for, but the original lockdowns were never going to eradicate the virus short of unacceptable economic pain. The unhappy but inevitable truth is that Americans will have to learn to cope with the virus, which means trial and error and more individual responsibility.”

The Hill noted that A combination of the coronavirus pandemic, economic uncertainty, and social unrest is prompting waves of Americans to move from large cities and permanently relocate to more sparsely populated areas. The trend has been accelerated by technology and shifting attitudes that make it easier than ever to work remotely. Residents of all ages and incomes are moving in record numbers to suburban areas and small towns.  A perfect storm of factors makes the decision to leave major cities like New York very obvious. Four upstate counties have seen an incredible surge in real estate demand, while the rest of the New York market is cratering.

The WSJ echoed these sentiments on global change, noting that governments are focusing more on national security than global trade, and video conferencing is exploding, as many businesses are enjoying its convenience and cost-effectiveness. After being forced to work from home, some businesses have realized it is not necessary for all employees to be physically present in the office and some employees will not return to a physical building; this may have a negative effect on business real estate.  In addition to the unknown long-term effect of business closings and job losses, there is also no way of predicting what services or items people may decide they no longer need or have learned to take care of themselves during quarantine and what effect all of this may have on the economy and the future of society in general.

Trump Threatens to Cut Federal Funding for Schools That Refuse to Reopen in the Fall (7.8.20) https://www.theblaze.com/news/trump-threatens-funding-schools-reopen?utm_source=theblaze-breaking&utm_medium=email&utm_campaign=20200708Trending-BLMAttackTrumpSupporter&utm_term=ACTIVE%20LIST%20-%20TheBlaze%20Breaking%20News

How the Coronavirus Will Reshape World Trade (6.20.20) WSJ

https://www.wsj.com/articles/how-the-coronavirus-will-reshape-world-trade-11592604911

Coping With Covid-19 (6.24.20) WSJ https://www.wsj.com/articles/coping-with-covid-19-11593041285

Americans Leave Large Cities For Suburban Areas & Rural Towns (7.5.20)

https://thehill.com/opinion/finance/505944-americans-leave-large-cities-for-suburban-areas-and-rural-towns

How the Coronavirus Will Reshape World Trade (6.20.20) WSJ

https://www.wsj.com/articles/how-the-coronavirus-will-reshape-world-trade-11592604911

The Coronavirus Pandemic Will Forever Alter the World Order (4.3.20) WSJ Henry Kissinger https://www.wsj.com/articles/the-coronavirus-pandemic-will-forever-alter-the-world-order-11585953005

Q-1 2020 The Coronavirus Quarter

This will be a somewhat different update because of the extraordinary circumstances of the last seven weeks. I think it’s important to examine more fully what may have actually happened, the motivations and agendas being pushed, and their devastating effects on world economies and global markets.

The first quarter of 2020 has changed everything; things will never be the same as they were before these events transpired. Good or bad the world has changed and the consequences of the worldwide quarantine and decisions made to counteract the coronavirus are still unfolding. Fear, lack of forethought and inaccurate statistics caused people, governments, and businesses to overreact and make short-sighted decisions with long-term consequences. The WSJ wrote:

“The U.S. economy has been cratered less by the coronavirus than by the response to it—driven by the undemocratic idea that “science” should rule, even when much of the science and the data behind it remain in dispute.  We’re told in this plague year that politicians have no role—in essence, that the people have no real rights against consensus science, which can demand that we forfeit our liberties and suspend the Constitution. Political leaders, elected to exercise judgment on our behalf, must defer to doctors, because the viral threat is addressable only through medical expertise.”

Many small businesses have closed their doors, never to re-open, and the massive job loss will ultimately cause many people to lose their cars, homes, retirement and go bankrupt.  This will cause a dramatic rise in domestic disputes, mental/emotional health issues, drug and alcohol abuse, homelessness, crime and the need for public assistance, as well as many other social problems. Suicide is already a greater mortal threat than the coronavirus in most areas, and all of the aforementioned factors will contribute to increased depression and loss of life as well. Every week the current restrictions remain in force, the worse these issues will become. As more accurate statistics are considered, many experts fear the risk accompanying the quarantine is becoming greater than the protection it may be providing, and states are meeting together to discuss re-opening businesses and easing quarantine requirements. Fox News anchor Tucker Carlson does an excellent twelve-minute segment summarizing these concerns (see below).

States Move to Coordinate on Reopening Plans (4.13.20) WSJ

https://www.wsj.com/articles/u-s-coronavirus-cases-rise-as-officials-weigh-when-to-restart-the-economy-11586774781?mod=hp_lead_pos1

We Need Politicians in a Pandemic (4.12.20) WSJ  https://www.wsj.com/articles/we-need-politicians-in-a-pandemic-11586710824

Tucker How Long Will the Lockdowns Last (4.6.20) Fox News  https://www.youtube.com/watch?v=ZCyqcoC747o

Economic Data Spur Debate Over Lifting Virus Restrictions (4.9.20) WSJ

https://www.wsj.com/articles/dire-economic-numbers-intensify-debate-over-lifting-coronavirus-restrictions-11586459653

Perspectives on the Pandemic (3.26.20) Dr. John Ioannidis of Stanford University Episode 1 https://www.youtube.com/watch?v=d6MZy-2fcBw&feature=youtu.be&inf_contact_key=fb956899ab666f9ff048a15970bc0d03cc0558ed5d4c28cbfab114022b1ec50d

Projection of 100K-240K Coronavirus Deaths Was Likely an Overestimate (4.8.20)

https://www.theblaze.com/news/fauci-admits-previous-coronavirus-death-projection-was-likely-an-overestimate?utm_source=theblaze-breaking&utm_medium=email&utm_campaign=20200408Trending-FauciOverestimate&utm_term=ACTIVE%20LIST%20-%20TheBlaze%20Breaking%20News

Is the Coronavirus as Deadly as They Say (3.24.20) WSJ https://www.wsj.com/articles/is-the-coronavirus-as-deadly-as-they-say-11585088464

Inaccurate Virus Models Are Panicking Officials Into Ill-Advised Lockdowns (3.25 20) The Federalist https://thefederalist.com/2020/03/25/inaccurate-virus-models-are-panicking-officials-into-ill-advised-lockdowns/

 

When all of the fear and paranoia is boiled away and accurate statistics are considered, we’re left with a new virus much like the flu, which a very small portion of the population are vulnerable to. Some interim precautions were understandable, and individuals should still take measures to protect themselves, but the overall reaction and projected mortality rates were extremely exaggerated. President Trump even withdrew US funding from the WHO because of their irresponsible acceptance of China’s claims on the coronavirus, inaccurate statistics and projections and failure to share information about the pandemic as it spread.

As with any crisis, various individuals, organizations and governments will attempt to use the crisis to further their agendas. Some governors and legislatures are using this crisis to circumvent people’s constitutional rights preventing or curtailing the purchase of firearms and ammunition, and preventing peaceful assembly. George Soros, Henry Kissinger, the Pope, the UN and others are calling for more global control that supersedes national sovereignty in order to require mandatory vaccinations. Bill Gates is pushing legislation to require mandatory vaccination of all American citizens and the insertion of an RFID chip, purportedly to monitor our health and help control future outbreaks. He is building seven factories to manufacture seven potential vaccines.

A number of reputable sources have drawn a direct correlation between 5G and the coronavirus and some have claimed the virus narrative was created as a cover-up for the negative effects of 5G. I don’t believe 5G causes the coronavirus, but I do believe it can negatively impact health, causing people to be more vulnerable to the virus. Some municipalities, like San Francisco, have passed ordinances in an attempt to prevent 5G towers from being built due to health concerns about the negative effects of 5G radiation, especially on people with compromised immune systems. I believe the virus came out of the bio-research lab in Wuhan China, and China’s delayed response caused massive deaths of its own people in and around Wuhan. I also find it interesting, however, that there is little to no information about what happened in the rest of China, only Wuhan, almost as if the outbreak was confined to that area and did not affect the rest of China. We will likely never know for sure what really happened and why.

Trump Halts Payment to WHO, Blames Them for Delayed Response (4.14.20) Fox Video https://www.youtube.com/watch?v=QFzAt70L8e4&feature=emb_logo

AG Barr Very Concerned About Personal Liberty After Gates Proposes Digital Vaccine Certificates (4.9.20) https://www.lifesitenews.com/news/ag-barr-very-concerned-about-personal-liberty-after-gates-proposes-digital-vaccine-certificates

The Coronavirus Pandemic Will Forever Alter the World Order (4.3.20) WSJ Henry Kissinger https://www.wsj.com/articles/the-coronavirus-pandemic-will-forever-alter-the-world-order-11585953005

The Treasury Has Absorbed the Fed, NSARA & More (4.4.20)  https://www.youtube.com/watch?v=1yb0gAtfUnI&feature=share

Who Failed Trump Halts Payment to WHO, Blames Them for Delayed Response (4.14.20) Fox Video https://www.youtube.com/watch?v=QFzAt70L8e4&feature=emb_logo

How a Police State is Born (4.1.20) ) https://www.americanthinker.com/articles/2020/04/how_a_police_state_is_born.html

Big Government Using Coronavirus Pandemic To Secure More Control (3.27.20) The Blaze

https://www.youtube.com/watch?v=3SoZlR6xNZU&feature=emb_logo

The National Plan to Vaccinate Every American (3.21.20)

https://www.nvic.org/NVIC-Vaccine-News/March-2020/the-national-plan-to-vaccinate-every-american.aspx?utm_source=The+National+Plan+to+Vaccinate+Every+American&utm_campaign=July+NVIC+Newsletter&utm_medium=email

San Francisco is Resisting 5G, Calling it Ugly & Dangerous (6.1.19) Fox News

https://www.foxnews.com/tech/san-francisco-is-resisting-5g-calling-it-ugly-and-dangerous

 

Having addressed those things, let’s examine the effects of the coronavirus on global markets, national economies and personal finances. The Dow reached its all-time highest point 29,551 on Feb. 12, 2020. It closed Monday, March 23 at 18,559, down over 11,000, then rose to 23,719 to finish the week on April 10, 2020. Regardless of the actual or perceived threat posed by the Coronavirus, investors are reacting and market analysts have no grid system for what’s happening and no clue what will happen next. As soon as the epidemic peaks and cases begin to decline, states will begin to open to ease quarantine restrictions and reopen the economy.  It will take time to assess the damage; many businesses will not re-open and many more may not be able to survive in the aftermath, even with all the money which has been made available to them through low-interest loans and deferments. Gold has moved up in the last four weeks, but silver is lagging. The US stock future indexes are rising as states talk of re-opening.

Gold’s Powerful Rally Brings $1,800 Into View as Spreads Yawn (4.14.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-04-14/gold-s-powerful-rally-has-bulls-setting-their-sights-on-1-800?srnd=premium

U.S. Stock Index Futures Rise as Countries Look at Reopening (4.13.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-04-14/u-s-stock-index-futures-rise-as-countries-look-at-reopening?srnd=premium

Dow Escapes Bear Market With a 6% Rally (3.26.20) WSJ

https://www.wsj.com/articles/global-stock-markets-dow-update-3-26-2020-11585196225?mod=hp_lead_pos1

Dow Climbs in Best Day Since 1933 on Stimulus Hopes (3.24.20) WSJ

https://www.wsj.com/articles/global-stock-markets-dow-update-3-24-2020-11585012632?mod=hp_lead_pos1&mod=article_inline

Dow Plunges 10% With Stimulus Details Uncertain (3.18.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-03-17/asia-to-extend-stock-rally-after-u-s-shares-gain-markets-wrap

FDIC Asks Americans to Keep Their Money in the Banks (3.25.20)

https://www.sovereignman.com/trends/fdic-asks-americans-to-keep-their-money-in-the-banks-27579/?utm_medium=email&utm_source=sm_notes&utm_campaign=notes&utm_content=20200325_fdic

U.S. Will Suspend All Travel From Europe for Next 30 Days (3.11.20) WSJ https://www.wsj.com/articles/coronavirus-outbreak-prompts-trump-to-question-europe-travel-restrictions-11583971156

Stock Markets Down More Than 7% After Trading Halt Lifts (3.9.20) WSJ

https://www.wsj.com/articles/asian-stock-markets-in-early-monday-sell-off-after-saudi-arabias-decision-to-cut-most-of-its-oil-prices-11583713399

Trump Administration to Delay April 15 Tax Deadline for Most Individuals (3.12.20) WSJ https://www.wsj.co m/articles/u-s-treasury-likely-to-push-back-april-15-tax-filing-deadline-sources-11583897351

 

Central Banks & Banks

The Federal Reserve lowered interest rates a half percent, and then lowered them again March 15 to almost 0; lower than the 2008 Financial Crisis. Even more worrisome, they are making the largest infusion of cash into the overnight repo market in history. They also are going to be buying $500 billion Treasury Securities and $200 billion Mortgage Back Securities. This dramatic action clearly shows that the financial fallout is much greater than people think, as these actions are unprecedented.

The Federal Reserve and many of the other central banks of the world have lowered interest rates and printed massive amounts of money, so there is not much more they can do from this point forward. The banking system is in trouble to the degree that the FDIC put out a video asking people not to take their money out of their banks. The lowest, longest-running rates of unemployment have also come to a halt, with unemployment rates skyrocketing. Bloomberg wrote, “The Federal Reserve’s balance sheet topped $5 trillion for the first time amid the U.S. central bank’s aggressive efforts to cushion debt markets against the coronavirus outbreak through large-scale bond-buying programs.

The Independent UK News reported, “The Bank of England has agreed to expand the overdraft facility it offers the government, amid concerns about potential strains in the state debt market brought on by the Covid-19 emergency. The Bank and the Treasury announced on Thursday morning that its long-standing Ways and Means (W&M) facility will be extended to enable the government to borrow as much as it needs to meet its commitments.”

Bank of England Extends Government’s Emergency Overdraft Account Amid Coronavirus Crisis (4.13.20)

https://www.independent.co.uk/news/business/news/coronavirus-bank-of-england-treasury-ways-means-overdraft-borrowing-a9457071.html

Fed Unveils New Programs to Support $2.3 Trillion in Lending (4.9.20) WSJ

https://www.wsj.com/articles/fed-announces-new-facilities-to-support-2-3-trillion-in-lending-11586435450

Federal Reserve’s Balance Sheet Tops $5 Trillion for First Time (3.26.20) Bloomberg  https://www.bloomberg.com/news/articles/2020-03-26/federal-reserve-s-balance-sheet-tops-5-trillion-for-first-time

FDIC Asks Americans to Keep Their Money in the Banks (3.25.20)

https://www.sovereignman.com/trends/fdic-asks-americans-to-keep-their-money-in-the-banks-27579/?utm_medium=email&utm_source=sm_notes&utm_campaign=notes&utm_content=20200325_fdic

Federal Reserve Issues $500 billion to Overnight Lending Program (3.14.20) The Blaze

https://www.theblaze.com/glenn-radio/federal-reserve-issues-500-billion-overnight-loan-to-banks

FDIC Asks Americans to Keep Their Money in the Banks (3.25.20)

https://www.sovereignman.com/trends/fdic-asks-americans-to-keep-their-money-in-the-banks-27579/?utm_medium=email&utm_source=sm_notes&utm_campaign=notes&utm_content=20200325_fdic

Negative Interest Rates in the US are Virtually Guaranteed Now (3.4.20) SMC https://www.sovereignman.com/trends/negative-interest-rates-in-the-us-are-virtually-guaranteed-now-27405/?utm_medium=email&utm_source=sm_notes&utm_campaign=notes&utm_content=20200304_interest

Fed Cuts Rates to Near Zero and Will Relaunch Bond-Buying Program (3.15.20) WSJ

https://www.wsj.com/articles/fed-faces-crucial-decisions-to-alleviate-virus-shock-11584303662

Fed Unveils Dramatic Measures to Ease Market Strain on Virus (3.12.20) Bloomberg https://www.bloomberg.com/news/articles/2020-03-12/n-y-fed-to-conduct-purchases-across-range-of-maturities-k7ozy3u5?srnd=premium

Federal Reserve Issues $500 Billion to Overnight Lending Program (3.14.20)

https://www.theblaze.com/glenn-radio/federal-reserve-issues-500-billion-overnight-loan-to-banks?utm_source=theblaze-dailyAM&utm_medium=email&utm_campaign=Daily-Newsletter__AM%202020-03-15&utm_term=TheBlaze%20Daily%20AM%20-%20last%20270%20days

 

Debt Recession

The US passed a $2 trillion stimulus plan and another trillion-dollar plan is already in the works.  Some nations can afford to deal with the crisis, but many cannot. Italy‘s debt burden even before this crisis was more than 120% of GDP and their banks were in trouble before the crisis. Simon Black wrote, “Every scenario is on the table, and absolutely anything can happen, but it seems pretty clear that the most heavily indebted countries are in big trouble… and we may be looking at a major sovereign debt crisis over the next few months.”  Currently, the expectation of the IMF and most nations is that we are potentially headed for the most difficult recession the world has ever seen.

World Economy Is Almost Certainly in Recession (4.14.20) WSJ

https://www.wsj.com/articles/coronavirus-afflicted-global-economy-is-almost-certainly-in-recession-11586867402

Mapping the COVID-19 Recession (4.7.20)

https://www.project-syndicate.org/commentary/mapping-covid19-global-recession-worst-in-150-years-by-kenneth-rogoff-2020-04

Coronavirus Crisis Legacy Mountains of Debt (4.9.20) WSJ

https://www.wsj.com/articles/coronavirus-crisis-legacy-mountains-of-debt-11586447687

There’s a Major Sovereign Debt Crisis Looming (4.4.20) SMC  https://www.sovereignman.com/trends/theres-a-major-sovereign-debt-crisis-looming-27612/?utm_medium=email&utm_source=sm_notes&utm_campaign=notes&utm_content=20200402_crisis

What’s in the $2T Stimulus Bill (3.28.20) Glen Beck https://www.youtube.com/watch?time_continue=17&v=27T4IfIgNb4&feature=emb_logo

The Small Business Administration is now bigger than Walmart (3.30) SMC

https://www.sovereignman.com/trends/the-small-business-administration-is-now-bigger-than-walmart-27604/?utm_medium=email&utm_source=sm_notes&utm_campaign=notes&utm_content=20200330_ussba

Federal Reserve’s Balance Sheet Tops $5 Trillion for First Time (3.26.20) WSJ  https://www.bloomberg.com/news/articles/2020-03-26/federal-reserve-s-balance-sheet-tops-5-trillion-for-first-time

White House, Lawmakers Strike Stimulus-Bill Deal (3.24.20) WSJ

https://www.wsj.com/articles/trump-administration-senate-democrats-said-to-reach-stimulus-bill-deal-11585113371

Bond Downgrades Begin Amid Coronavirus Slowdown (3.24.20) WSJ

https://www.wsj.com/articles/bond-downgrades-begin-amid-coronavirus-slowdown-11585045800

 

World Economies

The US, which just two months ago had some of the best unemployment numbers ever, is now experiencing some of the highest unemployment numbers ever. Many companies large and small have applied for assistance under the 2 trillion dollar stimulus package passed by Congress. The WSJ wrote, “As job losses ricochet across the U.S., Europe is conducting an unprecedented experiment in navigating the economic fallout from the new coronavirus: Persuade companies to forgo layoffs by subsidizing private-sector wages on a massive scale.  More than one million companies across the continent have signed up for subsidy programs that essentially transform their payrolls into a system for delivering billions of euros in stimulus funds directly to households.”

Countries around the world are looking to their governments for assistance, and many countries are looking to the IMF to help provide that assistance. The WSJ reposted, “Scores of countries are asking for bailouts and loans from financial institutions with $1.2 trillion to lend.  The health of the global economy comes down to a race between money flooding out of emerging markets amid the coronavirus pandemic and the efforts of the International Monetary Fund and World Bank to pump money back in. The two Washington-based finance institutions find themselves facing the greatest challenge since they were established as the heart of the international monetary system at the 1944 Bretton Woods Conference.”

IMF & World Bank Face Deluge of Aid Requests From Developing World (4.9.20) WSJ https://www.wsj.com/articles/imf-world-bank-face-deluge-of-aid-requests-from-developing-world-11586424609?mod=article_inline

Europe Unleashes Massive Subsidies to Stem Job Losses (4.9.20) WSJ

https://www.wsj.com/articles/europe-unleashes-massive-subsidies-to-stem-job-losses-11586437241?mod=world_major_1_pos5

U.S. Jobless Claims Soar for Third Straight Week (4.9.20) WSJ

https://www.wsj.com/articles/u-s-surge-in-unemployment-claims-expected-to-continue-11586424605

US Weekly Jobless Claims Seen At Record High – Again (4.2.20) Fox News

https://www.foxbusiness.com/markets/us-weekly-jobless-claims-seen-at-record-high-again

Record Rise in Unemployment Claims Halts History Run of Job Growth (3.26.20) WSJ https://www.wsj.com/articles/the-long-run-of-american-job-growth-has-ended-11585215000?mod=hp_lead_pos2

New Zealand Stocks Plummet, Set to Enter Bear Market (3.12.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-03-12/new-zealand-stocks-plummet-set-to-enter-bear-market?srnd=premium

Oil has fallen radically, but this not because of the Coronavirus, it’s because the Saudis increased their output, which caused other countries to increase their output, causing oil prices to freefall.  Bloomberg wrote, “Saudi Arabia plans to boost oil output next month to well above 10 million barrels a day, as the kingdom responds aggressively to the collapse of its OPEC+ alliance with Russia.  The world’s largest oil exporter engaged in an all-out price war on Saturday by slashing pricing for its crude by the most in more than 30 years. State energy giant Saudi Aramco is offering unprecedented discounts in Asia, Europe and the U.S. to entice refiners to use Saudi crude.”

Saudis Plan Big Oil Output Hike, Beginning All-Out Price War (3.7.20) Bloomberg   https://www.bloomberg.com/news/articles/2020-03-07/saudis-plan-big-oil-output-hike-beginning-all-out-price-war

U.S. Oil Majors Are Snubbing Climate-Conscious Rivals in Europe (3.5.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-03-05/exxon-ceo-calls-rivals-climate-targets-a-beauty-competition

How Do You Solve a Problem Like Fannie and Freddie (3.2.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-03-02/fannie-mae-and-freddie-mac-s-fate-is-in-the-hands-of-one-man?srnd=premium

European Stocks Have Worst Day in Decades (3.12.20) WSJ

https://www.wsj.com/articles/markets-shudder-despite-ecb-virus-package-11584025369

 

Political Uncertainty

Political instability is everywhere. Some elections are still being held, but many are being postponed because no one can go out and vote. We also have the same problems we’ve been dealing with before the crisis still lurking in the background. The Huawei controversy is still raging and China has become less trustworthy due to this issue as well as a number of other allegations, and their mishandling of the virus. The only country moving closer to them is the Philippians. The WSJ reported in February, “U.S. officials say Huawei Technologies Co. can covertly access mobile-phone networks around the world through “back doors” designed for use by law enforcement, as Washington tries to persuade allies to exclude the Chinese company from their networks.  Intelligence shows Huawei has had this secret capability for more than a decade.  U.S. officials say Huawei has built equipment that secretly preserves the manufacturer’s ability to access networks through these interfaces without the carriers’ knowledge.”

One thing for sure is that political instability and uncertainty will be increasing not decreasing in the days ahead.

China Blasts Trump’s Move to Pull WHO Funding, Pledges Support (4.14.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-04-15/china-blasts-trump-s-move-to-pull-who-funding-pledges-support

Legally Embattled Netanyahu Claims Victory After Turbulent Year (3.2.20)  https://www.bloomberg.com/news/articles/2020-03-03/netanyahu-edges-close-to-victory-at-end-of-tumultuous-year

Poland Sets Presidential Election Date as Clash With EU Deepens (2.5.20) Bloomberg https://www.bloomberg.com/

U.S. Officials Say Huawei Can Covertly Access Telecom Networks (2.11.20) WSJ https://www.wsj.com/articles/u-s-officials-say-huawei-can-covertly-access-telecom-networks-11581452256

Philippines to End Military Pact With U.S. (2.11.20) WSJ https://www.wsj.com/articles/philippines-to-end-military-pact-with-u-s-11581439273

Trump & Fighting a War Invisible Enemy Isn’t Just Coronavirus But Socialism, Slavery Too (4.6.20) The Blaze https://www.youtube.com/watch?v=aH4BTpFkcaY&feature=emb_logo

Biological Weapons the Focus of China’s Military Research in the Last 20 Years (March 2020)

https://japan-forward.com/biological-weapons-the-focus-of-chinas-military-research-in-the-last-20-years/amp/

March 2nd Coronavirus Update We’re all Gonna Get it, But We’ll be Fine (3.2.20)

https://www.youtube.com/watch?v=8Ohb9iWnBHg&feature=emb_logo

 

CDC US Coronavirus Outbreak is a Matter of When Not If (2.26.20) The Blaze

https://www.youtube.com/watch?v=N73oU58uTII&feature=emb_logo

 

This Is How Many People Die From the Flu Each Year, According to the CDC (2.11.20)

https://www.health.com/condition/cold-flu-sinus/how-many-people-die-of-the-flu-every-year

(UPDATED 4/1) Coronavirus Reality v Perception and World Markets

The Coronavirus is a mixed bag of truth, lies, deception, confusion, reaction and overreaction.   It has become clear, that the greatest threat and thing to prepare for is not the virus, but the reaction to the virus.  The virus will pass, but governments and the populous reaction to it have changed everything, and an entirely new course has been set politically and economically and financially.

While reasonable precautions should be taken to prevent and manage the spread of COVID-19, we should not be fearful, panic or overreact. Fear is what causes social & news media, governments, markets and individuals tend to overreact to whatever is going on around them.

The virus does present a threat, but it pales in comparison to a plethora of other mortal threats in this world, and society is overreacting. Many suspect the virus will also slow with the warmer weather, like the flu season which usually finishes off in mid-April. Although most citizens seem to only exhibit minor symptoms if affected by the virus at all, it is still good to take precautions without over-reacting. While the COVID-19 numbers are likely skewed due to the number of unreported cases, below are some statistics on the common flu and how it compares to the Coronavirus to provide some perspective.

Flu Statistics:

  • 5% – 20% of the U.S. population that will get the flu, on average, each year.
  • 200,000 Americans hospitalized each year because of problems with the flu.
  • 34,200 flu-related deaths in 2018-2019 Season
  • Globally the flu kills 290,000 to 650,000 annually –The World Health Organization (WHO) estimates

Worldometer on Coronavirus: (As of 4.1.20) https://www.worldometers.info/coronavirus/

  • Total Cases: 927,986
  • Deaths: 46,491
  • Recovered/Discharged: 193,474
  • Active Cases Globally: 688,021
  • Total Cases in US:        211,143
  • US Deaths: 4,713

It is important to consider the facts, as well as how people will react to situations regardless of the facts when planning for practical preparedness in these situations. While the numbers are likely off due to many unreported cases in which citizens never went to the doctor or hospital because their symptoms did not become severe, and while age, prior respiratory issues and/or already weakened immune systems have been a factor in the majority of deaths, it remains a threat and markets, individuals, and governments will continue to react.

Is the Coronavirus as Deadly as They Say (3.24.20) WSJ https://www.wsj.com/articles/is-the-coronavirus-as-deadly-as-they-say-11585088464

Inaccurate Virus Models Are Panicking Officials Into Ill-Advised Lockdowns (3.25 20) The Federalist https://thefederalist.com/2020/03/25/inaccurate-virus-models-are-panicking-officials-into-ill-advised-lockdowns/

The Dow reached its all-time highest point 29,551 on Feb. 12, 2020. It closed Monday, March 23 at 18,559, down over 11,000, then rose to 21,336 to finish the week.  This was the largest drop since the 2008 financial crisis and the largest rise in history. The Federal Reserve lowered interest rates a half percent, and then lowered them again March 15 to almost 0; lower than the 2008 Financial Crisis. Even more worrisome, they are making the largest infusion of cash into the overnight repo market in history.  They also are going to be buying $500 billion Treasury Securities and $200 billion Mortgage Back Securities. This dramatic action clearly shows that the financial fallout is much greater than people think, as these actions are unprecedented.

Even when markets and central banks have a firm foundation, they will fluctuate with world events, but not to this degree. However, when stock market growth cycles peak and/or go into freefall and economies begin to falter, central banks lower interest rates and infuse cash into the banking system to attempt to re-stimulate the economy to sustain growth if possible. Regardless of the actual or perceived threat posed by the Coronavirus, investors are reacting and market analysts have no grid system for what’s happening and no clue what will happen next. In the last week of March, the longest Bull market in American history ended with the Dow dropping more than 20% and the shortest Bear market in history, lasting only three days, having risen 20%. Currently, the Dow is still down 8,000 points from its high, but needless say it’s a roller coaster.

The Federal Reserve and many of the other central banks of the world have lowered interest rates and printed massive amounts of money, so there is not much more they can do from this point forward.  The banking system is in trouble, to the degree that the FDIC put out a video asking people not to take their money out of their banks. The lowest, longest-running rates of unemployment have also come to a halt, with unemployment rates skyrocketing. What will happen next is unclear, as all the restrictions aren’t over yet and the degree of economic fallout is still to be determined.

Dow Escapes Bear Market With a 6% Rally (3.26.20) WSJ

https://www.wsj.com/articles/global-stock-markets-dow-update-3-26-2020-11585196225?mod=hp_lead_pos1

Record Rise in Unemployment Claims Halts History Run of Job Growth (3.26.20) WSJ https://www.wsj.com/articles/the-long-run-of-american-job-growth-has-ended-11585215000?mod=hp_lead_pos2

Dow Plunges 10% With Stimulus Details Uncertain (3.18.20) Bloomberg

https://www.bloomberg.com/news/articles/2020-03-17/asia-to-extend-stock-rally-after-u-s-shares-gain-markets-wrap

FDIC Asks Americans to Keep Their Money in the Banks (3.25.20)

https://www.sovereignman.com/trends/fdic-asks-americans-to-keep-their-money-in-the-banks-27579/?utm_medium=email&utm_source=sm_notes&utm_campaign=notes&utm_content=20200325_fdic

Fed Cuts Rates to Near Zero and Will Relaunch Bond-Buying Program (3.15.20) WSJ

https://www.wsj.com/articles/fed-faces-crucial-decisions-to-alleviate-virus-shock-11584303662

Stocks Plunge 10% in Dow’s Worst Day Since 1987 (3.12.20) WSJ

https://www.wsj.com/articles/global-stocks-follow-u-s-markets-lower-11583975524

Fed Unveils Dramatic Measures to Ease Market Strain on Virus (3.12.20) Bloomberg https://www.bloomberg.com/news/articles/2020-03-12/n-y-fed-to-conduct-purchases-across-range-of-maturities-k7ozy3u5?srnd=premium

Federal Reserve Issues $500 Billion to Overnight Lending Program (3.14.20)

https://www.theblaze.com/glenn-radio/federal-reserve-issues-500-billion-overnight-loan-to-banks?utm_source=theblaze-dailyAM&utm_medium=email&utm_campaign=Daily-Newsletter__AM%202020-03-15&utm_term=TheBlaze%20Daily%20AM%20-%20last%20270%20days

U.S. Will Suspend All Travel From Europe for Next 30 Days (3.11.20) WSJ https://www.wsj.com/articles/coronavirus-outbreak-prompts-trump-to-question-europe-travel-restrictions-11583971156

Stock Markets Down More Than 7% After Trading Halt Lifts (3.9.20) WSJ

https://www.wsj.com/articles/asian-stock-markets-in-early-monday-sell-off-after-saudi-arabias-decision-to-cut-most-of-its-oil-prices-11583713399

As with any emergency, take common-sense steps to be as prepared as possible for any situation and the public’s reaction to it. Utilize good judgment in purchasing extra food and provisions, and keep some extra cash at home (don’t hoard the toilet paper!). The following articles contain a variety of viewpoints and suggestions in regard to the Coronavirus. I am not necessarily in agreement with everything in these articles and interviews, but if you are looking for more information on this subject you may find these helpful.

Farr’s Law and COVID-19 https://nypost.com/2020/03/08/coronavirus-going-to-hit-its-peak-and-start-falling-sooner-than-you-think/

March 2nd Coronavirus Update We’re all Gonna Get it, But We’ll be Fine (3.2.20)

https://www.youtube.com/watch?v=8Ohb9iWnBHg&feature=emb_logo

What Are Your Odds of Getting the Flu https://www.webmd.com/cold-and-flu/flu-statistics

CDC US Coronavirus Outbreak is a Matter of When Not If (2.26.20) The Blaze

https://www.youtube.com/watch?v=N73oU58uTII&feature=emb_logo

CDC outlines what closing schools, businesses would look like in a pandemic  (2.25.20) CNBC https://www.cnbc.com/2020/02/25/cdc-outlines-what-closing-schools-businesses-would-look-like-in-us-pandemic.html

This Is How Many People Die From the Flu Each Year, According to the CDC (2.11.20)

https://www.health.com/condition/cold-flu-sinus/how-many-people-die-of-the-flu-every-year

WHO Declares Coronavirus Outbreak a Global Public-Health Emergency (1.30.20) WSJ https://www.wsj.com/articles/coronavirus-triggers-damage-control-from-governments-companies-11580396657

3rd Quarter Economic Update

SUMMARY

The 3rd quarter ended with great volatility which continued into the first two weeks of the 4th quarter. US stocks fell sharply in the first week of October due to concerns of slowing US manufacturing; all three major indexes have been negative for the past 12 months.  The second week brought news of potential succession of the trade war between the US and China, after which the stock market recovered.  Many large players have withdrawn their participation in Facebook’s new Libra crypto currency.  Political unrest continued around the world, especially in Hong Kong.  Brexit didn’t break in the third quarter, but Boris Johnson struck a deal with the EU on Oct 16th and brought it to Parliament for approval, but the deadline is less than two weeks away.  While everyone was watching the trade wars, global markets and political events, there was much under-reported central bank action, and a brand new international wire system also came online.

U.S., China Move Forward on Trade (10.11.19) WSJ

https://www.wsj.com/articles/trump-strikes-upbeat-notes-on-trade-talks-11570804097

Facebook’s Backers of Libra Reconsider Their Involvement (10.1.19) WSJ

https://www.wsj.com/articles/visa-mastercard-others-reconsider-involvement-in-facebook-s-libra-network-11569967023

Glenn Beck Issues Fiscal Warning Just Like he Did Before the 2008 Financial Crisis Something is Very Wrong (9.19.19) The Blaze https://www.theblaze.com/glenn-radio/federal-reserve-repo-market?utm_source=Sailthru&utm_medium=email&utm_campaign=Daily-Newsletter__PM-Final%202019-09-19&utm_term=TheBlaze%20Daily%20PM%20-%20last%20270%20days

 

CENTRAL BANKS

In early September, The Federal Reserve voted to cut interest rates by a quarter-percentage point for the second time in two months, due to rising concerns of a global slowdown.  The WSJ reported:

For first time since 2008 the central bank injects funds into money markets after a sudden shortage of cash.  For the first time in more than a decade, the Federal Reserve injected cash into money markets Tuesday to pull down interest rates and said it would do so again Wednesday after technical factors led to a sudden shortfall of cash. The federal-funds rate, a benchmark that influences borrowing costs throughout the financial system, rose to 2.25% on Monday, from 2.14% Friday. The Fed seeks to keep the rate in a target range between 2% and 2.25%. Bids in the fed-funds market reached as high as 5% early Tuesday, according to traders, well above the band.  The New York Fed moved Tuesday morning to inject $53 billion into the banking system through transactions known as repurchase agreements, or repos. (The repo market is where one bank will borrow from another bank on a short term basis usually overnight, because it doesn’t have enough cash at a higher interest rate.)  The bank said Tuesday afternoon it would inject up to $75 billion more on Wednesday morning, but many in the market were looking beyond that decision.

The infusing of cash into the overnight banking system, which the Fed said they would continue to do until Oct 9th, is a clear indication of current and future troubles, however, this action has infused the banking system with sufficient cash, at least for the short term.  The Federal Reserve will extend its cash injections into overnight lending markets for at least another month, after pumping in more than $330 billion since mid-September, as banks face a wave of Treasury bond sales this week, amid a near-record budget deficit and ongoing concern over the strength of the U.S. economy.

In addition, “The Fed plans to buy $60 billion of Treasurys per month, and many are wondering if it is leading the charge back into quantitative easing, often known as money printing,” – WSJ.

The San Francisco Fed made the following concerning, and hopefully not prophetic, statement, “negative interest rates are a viable tool to provide stimulus to economies that need it, and the U.S. might have benefited from using it during the financial crisis.”.

The entire concept of negative interest rates is already hard to understand, the WSJ reported that, “The European Central Bank is about to start lending to some banks at less than it pays them for putting money on deposit.  The ECB said last week that it would both pay a higher rate of interest on deposits and charge a lower fee for lending, both under strict conditions. On the deposit side, the introduction of what the ECB calls “tiering” allows banks to avoid the penalty rate of minus 0.5% on deposits of excess reserves.”

Finding Meaning in Quantitative Easing (10.11.19) WSJ https://www.wsj.com/articles/finding-meaning-in-quantitative-easing-11570872601

Fed Paper Says Negative Rate Policy Can Provide Real Stimulus (10.15.19) WSJ

https://www.wsj.com/articles/sf-fed-paper-says-negative-rate-policy-can-provide-real-stimulus-11571158871?mod=hp_lista_pos4

Fed Extends Repos Until Nov 4 Dealers Brace for $193 Billion in Treasury Sales (10.7.19) https://www.thestreet.com/investing/fixed-income/fed-extends-repos-until-nov-4-dealers-brace-for-193-billion-in-treasury-sales-15116925

Fed Intervenes to Curb Soaring Short-Term Borrowing Costs (9.17.19) WSJ

https://www.wsj.com/articles/fed-to-conduct-first-overnight-repo-transactions-in-several-years-11568729757

Another Coming Recession Federal Reserve Funds Banks Billions, Market is Broken (9.21.19) TheBlaze

https://www.youtube.com/watch?v=bW7ZYc4w3ds&feature=youtu.be

Fed Cuts Rates by Quarter Point But Faces Growing Split (9.18.19) WSJ

https://www.wsj.com/articles/fed-cuts-rates-by-quarter-point-but-faces-growing-split-11568830081?mod=hp_lead_pos1

Big Banks Loom Over Fed Repo Efforts (9.26.19) WSJ https://www.wsj.com/articles/big-banks-loom-over-fed-repo-efforts-11569490202

A  New Central Bank Approach Pay Banks to Lend (9.17.19) WSJ

https://www.wsj.com/articles/a-new-central-bank-approach-pay-banks-to-lend-11568721602

 

A NEW INTERNATIONAL WIRE SYSTEM

The First Iranian English Economic Daily reported, “Governor of the Central Bank of Iran says Iran and Russia have connected their financial messaging services to handle two-way banking transactions.  Outlining details of his talks with the Russian delegation in Turkey, Abdolnasser Hemmati said banks in both countries are now connected through the Russian SPFS and Iran’s SEPAM. The initiative is to be used as an alternative to payments through SWIFT (Society for Worldwide Interbank Financial Telecommunication) for protection against third country sanctions.

Today the USD represents 60% of world reserves and 80% of global payments.  The reason this very significant is that the US has been able to influence and control any nation using US Dollars, by imposing sanctions and cutting off their ability to transact and wire money in and out of their country using SWIFT codes.  Iran and Turkey now have another way to wire money, effectively circumventing US and EU sanctions.  Reuters reported:

“Russian lawmakers on Tuesday backed the international use of a Russian alternative system for the global financial messaging network SWIFT designed by Moscow to eliminate the risk of Western sanctions.  Russia has held talks with China, India, Iran and Turkey about joint use of Russia’s financial messaging system, said Anatoly Aksakov, who heads the Russian Banking Association and a financial committee with the lower house of parliament.  “As the system has proved to be viable and efficient, it draws interest from both Russian and foreign players, it is proposed to give any legal entities, Russian and foreign, the possibility to use it,

SWIFT, was founded in 1973 and connects more than 11,000 institutions in over 200 countries and territories, it said on its website.  Moscow has also seen interest in joining the Russia-based system from Arab countries and is ready to start negotiations about creating a switch that would connect the Russian system with the European one, Aksakov said. 

This will greatly reduce the ability of the US, the EU and other nations to curtail rogue nations utilizing non-military economic options.  It will also reduce US control over world events and increase the influence and control held by Russia and other nations.

Banks in Iran, Russia Connected via Non-SWIFT Financial Messaging Service (9.18.19) https://financialtribune.com/articles/business-and-markets/99912/banks-in-iran-russia-connected-via-non-swift-financial-messaging

Russia Backs Global Use of its Alternative SWIFT System (9.9.19) Reuters

https://uk.reuters.com/article/russia-banks-swift/russia-backs-global-use-of-its-alternative-swift-system-idUKL8N2163BU

 

CURRENCY

The euro is down, the pound is up, and former partners are distancing themselves from Facebook’s new cryptocurrency Libra.  Gold & silver are up, but buyers of gold should beware as there are counterfeit gold bars being sold in world markets.

MasterCard, Visa, eBay, Stripe Drop Out of Facebook’s Libra Network (10.11.19) WSJ

https://www.wsj.com/articles/mastercard-drops-out-of-facebook-s-libra-payments-network-11570824139

Facebook Scrambles to Keep Libra on Track as Partners Waver (10.1.19)

https://www.wsj.com/articles/visa-mastercard-others-reconsider-involvement-in-facebook-s-libra-network-11569967023

Euro Drifts Toward Its Lowest Level Against Dollar in Years (10.3.19) WSJ

https://www.wsj.com/articles/how-low-can-the-euro-go-11570098097

Fake-Branded Bars Slip Dirty Gold Into World Markets (8.28.19)

https://www.reuters.com/article/us-gold-swiss-fakes-exclusive/exclusive-fake-branded-bars-slip-dirty-gold-into-world-markets-idUSKCN1VI0DD

 

RECESSION & DEBIT

Fannie and Freddie are being released from government oversight and have already been loosening lending requirements to allow more people who don’t meet qualifications to get mortgages.  This sounds eerily very familiar, maybe they should rent The Big Short and watch it to refresh their memories.  According to the WSJ:

Mortgage-finance companies Fannie Mae FNMA 3.26% and Freddie Mac FMCC 3.16%   will start keeping earnings as part of a Trump administration process aimed at moving the companies out of conservatorship and back into the private sector.  Fannie and Freddie are central players in the housing market, buying about half of all U.S. mortgages from lenders and packaging them for issuance as securities. The government effectively nationalized them during the 2008 crisis in a bid to stabilize the housing market as mortgage defaults mounted.”

The US economy is doing well, but there are signs pointing to lurking trouble, like General Electric freezing pension plans for 20,000 workers, the US staring its new fiscal year almost $23B in debt, the Federal Reserve printing and pumping hundreds of billions of dollars into the overnight bank and repro markets, and rising individual debt levels coupled with loosening lending requirements.

General Electric Freezes Pension Plans for 20,000 US employees in an Effort to Reduce Debt (10.7.19) Yahoo News |  https://www.youtube.com/watch?v=CarVrn3JyaA

General Electric to Freeze Pensions for 20,000 Workers (RTD Quick Take) (10.7.19) https://www.youtube.com/watch?v=UorlsmGFuAk&feature=youtu.be

1,015,736,491,184 Reasons to Have a Plan B (10.1.19) SMC https://www.sovereignman.com/trends/1015736491184-reasons-to-have-a-plan-b-25656/?utm_medium=email&utm_source=sm_notes&utm_campaign=notes&utm_content=20191001_debt

The Fed, Banks Printing Money to Prevent Trouble Recession Will Come Soon (9.24.19) GB https://www.glennbeck.com/radio/the-fed-banks-printing-money-to-prevent-trouble-recession-will-come-soon

Fannie, Freddie to Retain Earnings (9.30.19) WSJ  https://www.wsj.com/articles/fannie-freddie-to-retain-earnings-11569851912

 

WORLD MARKETS

U.S. stocks rallied as banks and health-care companies reported stronger than forecasted 3rd quarter results, and a ceasefire was called on the US vs China trade war, at least temporarily.  Services, however, showed a sharp drop globally, and manufacturing also slowed.

The WSJ reported that, “The U.S. plans to swiftly impose tariffs on $7.5 billion in aircraft, food products and other goods from the European Union after the World Trade Organization authorized the levies Wednesday.  “For years, Europe has been providing massive subsidies to Airbus that have seriously injured the U.S. aerospace industry and our workers,” U.S. Trade Representative Robert Lighthizer said in a statement. “Finally, after 15 years of litigation, the WTO has confirmed that the United States is entitled to impose countermeasures in response to the EU’s illegal subsidies.”

Germany’s economy has been drifting toward recession for most of 2019, and their factories continue to preform poorly due to trade wars and Brexit..

Stocks Climb After Strong Results From Banks, Health Sector (10.15.19) WSJ

https://www.wsj.com/articles/u-k-pound-posts-gains-on-brexit-optimism-11571130220?mod=hp_lead_pos1

EU Warns of 5G Risks Amid Scrutiny of Huawei (10.11.19) WSJ

https://www.wsj.com/articles/eu-warns-of-5g-risks-amid-scrutiny-of-huawei-11570814799

Services Stumble Risks Sharper Global Slowdown (10.3.19) WSJ

https://www.wsj.com/articles/services-stumble-threatens-sharper-global-slowdown-11570094948

U.S. to Impose Tariffs on EU Goods After WTO’s Airbus Ruling (10.2.19) WSJ

https://www.wsj.com/articles/u-s-can-levy-tariffs-on-eu-exports-over-airbus-wto-says-11570025040

Stocks Drop on Worries About Growth (10.2.19) WSJ

https://www.wsj.com/articles/global-stocks-fall-amid-rising-fears-of-economic-slowdown-11570004904

Global Stocks Absorb Blow of Manufacturing Slowdown (10.1.19) WSJ

https://www.wsj.com/articles/global-stocks-fall-amid-rising-fears-of-economic-slowdown-11570004904

Germany on Brink of Recession as Factories Slump (9.23.19) WSJ

https://www.wsj.com/articles/germany-on-brink-of-recession-as-factories-slump-11569237721?mod=hp_lista_pos3

 

BREXIT

According to the WSJ, “Mr. Johnson made a significant concession earlier in October when he agreed that Northern Ireland could stay aligned to EU regulations, eliminating the need for regulatory checks on the island of Ireland, with checks being carried out when goods come from Britain into Northern Ireland.  In recent days, Britain has also proposed a special customs partnership that would allow Northern Ireland to effectively remain in the U.K. and EU customs union.

On Oct 16, the UK and EU struck an agreement. Prime Minister Johnson returned to the UK with the deal and parliament voted to approve it, however not the timetable of the deal for an Oct 31st exit.  Hence, although both sides would greatly benefit from this deal, its execution remains uncertain.

Johnson Brexit Deal Clears Hurdle but Timetable Rejected (10.22.19) WSJ

https://www.wsj.com/articles/boris-johnsons-brexit-deal-clears-vital-hurdle-in-parliament-11571768188

U.K. & EU Agree on Draft Brexit Deal, Paving Way for Key Vote (10.17.19) WSJ

https://www.wsj.com/articles/brexit-talks-are-dealt-a-blow-as-northern-irish-party-rejects-draft-11571294766?mod=hp_lead_pos4

Brexit Negotiators Edge Closer to a Draft Deal (10.15.19) WSJ

https://www.wsj.com/articles/eus-barnier-says-brexit-deal-is-still-possible-this-week-11571124007?mod=hp_lead_pos2

 

POLITICAL UNREST

Political unrest continues globally with rioting in Ecuador, Peru, Spain, Iran, Iraq, Russia and Hong Kong.  South Korea launched a ballistic missile, this time from a submarine, as a prelude to new talks with the US.  Turkey who continues to move away from the west towards Russia, started bombing Kurdish forces in Syria as the US declared it was exiting Syria.  The US then imposed more economic sanctions against Turkey, causing them to pause their attack.

Ecuador Begins Cleanup After Nearly Two Weeks of Deadly Protests (10.14.19) WSJ https://www.wsj.com/articles/ecuador-begins-cleanup-after-nearly-two-weeks-of-deadly-protests-11571089214

Spain’s Catalan Separatist Leaders Found Guilty of Sedition (10.14.19) WSJ

https://www.wsj.com/articles/catalan-separatist-leaders-sentenced-for-2017-independence-referendum-11571043234

Iraq Acts to End Deadly Response to Protests (10.9.19) WSJ

https://www.wsj.com/articles/iraq-acts-to-end-deadly-response-to-protests-11570464203

Peruvian Crisis Divides Political Class (10.1.19) WSJ

https://www.wsj.com/articles/perus-armed-forces-back-president-vizcarra-amid-constitutional-crisis-11569937062

One Hong Kong District Becomes a Combat Zone (10.1.19) WSJ

https://www.wsj.com/articles/one-hong-kong-district-becomes-a-combat-zone-11569953252

Turkey Agrees to Pause Military Operations in Syria (10.17.19) WSJ

https://www.wsj.com/articles/pence-leads-u-s-efforts-to-halt-turkey-offensive-in-syria-11571308486?mod=hp_lead_pos1

Turkey Begins Offensive Against U.S. Ally in Syria (10.9.19) WSJ

https://www.wsj.com/articles/turkey-begins-offensive-in-syria-11570627632

U.S. Officials Are Worried About Turkish Foray Into Syria (10.13.19) WSJ

https://www.wsj.com/articles/u-s-officials-are-worried-about-turkey-foray-into-syria-11570103533

North Korea Says it Successfully Tested New Submarine-Launched Ballistic Missile (10.2.19) Reuters https://www.reuters.com/article/us-northkorea-missiles/north-korea-says-successfully-tested-new-submarine-launched-ballistic-missile-idUSKBN1WH2GS

 

EU

Polish and Hungarian election results were another win for nationalism in Europe.  Poland and Hungary have been at odds with the EU for the last two years.  In Austria, another nationalist, former Chancellor Sebastian Kurz, won his election, continuing the rejection of EU establishment candidates across Europe.  German, French and other elections are coming up in the near future and the EU globalists parties are not faring well.

Poland’s Ruling Nationalists Look Narrowly Poised to Return to Power for Another 4 Years (10.11.19) WSJ https://www.wsj.com/articles/polands-ruling-nationalists-eye-new-term-as-voting-begins-11570953095

Austrian Conservative Sebastian Kurz Wins Election (9.29.19) WSJ

https://www.wsj.com/articles/austria-s-conservative-sebastian-kurz-wins-election-with-majority-of-votes-11569771495

What Happened in 2008 & Will it Happen Again? (9.17.19)

video: https://youtu.be/hgK7HR91W9A

In this presentation we discuss:

  • What happened in 2007-2008?
  • What’s happening today that is setting the stage for a repeat?
  • How will “non-performing loans” effect China, the EU, Japan, the US and global markets?
  • Why would a banking crisis today, be far more difficult than in 2008?
  • How does this effect you and what can you do about it?

NEW – Live Weekly Update – Tune in Tuesdays

Every Tuesday night at 7:00 P.M. EST, I will be providing a weekly update on international economics, global markets and political events.  Times are changing and events are unfolding in unprecedented ways that have experts scratching their heads at how it will all play out.

My hope is that this show will provide insight, discernment and greater understanding into the political and economic landscape, so we can be men and women who understand the times and know what to do.  I ask that you please pray for this effort and invite you to listen to the broadcast.

Here is the link to the next broadcast: https://www.youtube.com/watch?v=OhevvLYJoK4  

 

Sept. 3rd Episode: https://www.youtube.com/watch?v=OhevvLYJoK4&feature=em-lbrm

 

Political Upheaval & New Economics Create Uncertainty 

  • World markets are established far more on perception than they are on reality
  • New economics and unprecedented events are creating uncertainty
  • The War Between Globalism & Nationalism is dividing the EU and other nations
  • Elections are weakening the control of mainstream parties and global elites
  • Central banks have switched from raising rates in 2018 to lowering them in 2019
  • World Markets can’t be sure of anything, but they continue to rise along with their debt levels.

Are you prepared for what’s ahead? Get into position every Tuesday!
7:00 PM EST – 6:00 PM CST – 5:00 PM MST – 4:00 PM PST

Mid-August 2019 Economic Update (8.20.19)

Much has happened in the last several weeks.  The IMF downgraded world growth for the second time this year.  Boris Johnson replaced Theresa May as the UK Prime Minister and in his first speech said, “There are no ifs ands or buts, the UK will exit the European Union with or without an agreement by Oct 31, 2019.”  He also said he would not meet with EU officials unless they give him a better deal than they gave former PM May.  The G-7 Nations are meeting and all eyes and ears are on President Trump to see what he will do next in the trade wars.  The EU economy is on shaky ground with a nearly zero growth rate, and they fear they will be the next trade war victims, if they don’t get rid of their trade barriers and open their markets to US trade.  Gold has gone up almost $300 an ounce for the first time in five years and crossed the $1500 threshold, which is a 25% increase for 2019.  Central banks are lowering interest rates, while political unrest continues to rise.

Europe’s Shaky Union Faces Trump’s G-7 Stress Test (8.20.19) Bloomberg

https://www.bloomberg.com/news/articles/2019-08-20/trade-war-latest-trump-merkel-macron-g7-cars-eu-biarritz-jzjpvbgc?srnd=premium

IMF Downgrades World Growth, Warns of Precarious 2020 (7.23.19) Yahoo News

https://news.yahoo.com/imf-downgrades-world-growth-warns-precarious-2020-143309185.html

 

Currency & Crypto-Currency

JP Morgan wrote, “China, the economies of Southeast Asia, including India, have strong secular tailwinds driven by younger demographics and proliferating technological know-how. Specifically, the Asian economic zone—from the Arabian Peninsula and Turkey in the West to Japan and New Zealand in the East and from Russia in the North and Australia in the South—now represents 50% of global GDP and two-thirds of global economic growth. Of the estimated $30 trillion in middle-class consumption growth between 2015 and 2030, only $1 trillion is expected to come from today’s Western economies. As this region grows, the share of non-USD transactions will inevitably increase which will likely erode the dollar’s “reserveness”, even if the dollar isn’t replaced as the dominant international currency.  In other words, in the coming decades we think the world economy will transition from U.S. and USD dominance toward a system where Asia wields greater power. In currency space, this means the USD will likely lose value compared to a basket of other currencies, including precious commodities like gold.

New Zealand passed legislation allowing for payments to be made with crypto-currency.  Many nations have expressed both concern and outright disagreement with Facebook’s plan to release its own crypto called Libra, including the Fed Chairman Jerome Powell.  Bloomberg reported: “The People’s Bank of China is “close” to issuing its own cryptocurrency, according to a senior official.  Mu repeated the PBOC’s intention that the digital currency would replace cash in circulation, rather than M2, which would generate credit and impact monetary policy. The digital currency would also support the yuan’s circulation and internationalization, he said.  (China’s PBOC Considers Plan to Replace Cash and Sideline Bitcoin).  The remarks signal the PBOC is inching toward formally introducing a digital currency of its own after five years of research. Facebook Inc.’s push to create cryptocurrency Libra has caused concerns among global central banks, including the PBOC, which said the digital asset must be put under central bank oversight to prevent potential foreign exchange risks and protect the authority of monetary policy.”  The Swedes, on the other hand, are getting chips in their hands which allow them to buy and sell without cash credit cards or crypto- currency.

China’s PBOC Says Its Own Cryptocurrency Is Close to Release (8.11.19) Bloomberg

https://www.bloomberg.com/news/articles/2019-08-12/china-s-pboc-says-its-own-cryptocurrency-is-close-to-release

New Zealand Officially Legalizes Paying Employees With Crypto-Currency (Aug 2019)

https://www.classic.ird.govt.nz/resources/1/c/1c6029d0-611c-4a15-9cbf-b712129ab76c/tib-vol31-no7.pdf

Swedes are Getting Implants in Their Hands to Replace Cash, Credit Cards (7.14.19) https://nypost.com/2019/07/14/swedish-people-are-getting-chip-implants-to-replace-cash-credit-cards/

Powell Says Libra Cannot go Forward without Addressing Serious Concerns (7.10.19) Yahoo Finance   https://finance.yahoo.com/news/powell-libra-cannot-go-forward-without-addressing-serious-concerns-212100567.html

Is the Dollar’s Exorbitant Privilege Coming to an End (7.10.19)

https://privatebank.jpmorgan.com/gl/en/insights/investing/is-the-dollar-s-exorbitant-privilege-coming-to-an-end

 

The Gold Rush is On

Generally, if gold is going up, a company whose business is directly or indirectly related to gold also goes up.  However, if that company is not wisely managed, makes mistakes in its business operations and/or one of its managers or employees commits an illegality, it could go down in a rising gold market.  Many experts believe there is far more paper gold than there is physical gold, and in a crisis, if people want to exchange their paper gold for real gold, they will come up short.  When the stock market begins to falter, physical gold, gold company stocks and mutual funds with gold and precious metals are likely to go up.  However, if the gold and precious metals mutual fund has a big exposure to 401k plans, they could drop right along with the stock market, because, when  people panic, they don’t carefully scrutinizing their investment holdings, they tend to bail out of everything they have, driving down the value of every company in their mutual fund.  This does not happen with physical gold in a crisis, it usually goes up when the stock market goes down.  Bullion Star wrote, “The ECB, Swiss National Bank, and Swedish Riksbank have all issued coordinated press releases dated 26th July, confirming that there will not be a fifth central bank gold agreement when the current agreement expires in September 2019.”  This indicates that central banks are about to start buying gold.

By Not Renewing the CBGA, Central Banks in Europe Look Ready to Buy Gold (7.26.19) https://www.bullionstar.com/blogs/ronan-manly/by-not-renewing-the-cbga-central-banks-in-europe-look-ready-to-buy-gold/

 

Debt & Recession

The debt of most nations is rising, but there are some that have refused the addictive spend now, deal with the consequences later attitude of most nations and central banks.  The WSJ wrote: “The [U.S.] $22 trillion of debt is the most owed by any country on Earth. However, when compared with the size of the U.S. economy—also the world’s largest—the public debt doesn’t rank in the top 25, according to the Central Intelligence Agency’s World Factbook. Japan and Greece have the highest debt-to-GDP ratios, at 236% and 182%, respectively. The U.S. debt-to-GDP ratio is currently 104%.   The US economy is doing well, but the national debt is also rising at an alarming rate.  “Borrowing by the federal government is set to top $1 trillion for the second year in a row as higher spending outpaces revenue growth and concern about budget deficits wanes in Washington and on Wall Street” – WSJ.

Home Depot has joined many other companies in lowering their growth expectations, and the number of RV purchases has dropped which many say is a precursor to recession.  According to the 2019 Annual Report of The Board of Trustees of The Federal Old-Age & Survivors Insurance & Federal Disability Insurance Trust Funds, Social Security & Medicare trust funds will be fully depleted in 15 years.  The report estimates, Social Security and Medicare combined are underfunded by over $100 Trillion.  If things don’t change and corrective actions are not taken, the US dollar will eventually devalue and the US government will go bankrupt.  Congress passed a deal to defuse the debt-limit issue for two years and push the debate past the 2020 presidential election.  That said, the Trump Administration will do everything they can to keep the US economy afloat until after the 2020 election.  If re-elected, Trump will likely begin to deal with these problems and do the very unpopular things, like raise the age of Social Security from 62 & 65 to 67 & 70, cut all kinds of government programs and prepare the country for what’s coming.

The National Debt, Explained (8.11.19)  https://www.bloomberg.com/news/videos/2019-08-11/the-national-debt-explained-video

The U.S. National Debt, Visualized (8.3.19) WSJ https://www.wsj.com/articles/the-national-debt-visualized-11564830209

Federal Borrowing Soars as Deficit Fear Fades (7.29.19) WSJ

https://www.wsj.com/articles/treasury-to-borrow-over-1-trillion-in-2019-for-second-year-in-a-row-11564428624

White House & Congress Reach Deal on Spending, Debt Ceiling (7.22.19) WSJ https://www.wsj.com/articles/white-house-and-congress-near-agreement-on-spending-debt-ceiling-11563799484?mod=hp_lead_pos2

Switzerland Has a Budget Surplus. Here’s How, and What the US Could Learn (7.8.19) https://www.dailysignal.com/2019/07/08/switzerland-has-a-budget-surplus-heres-how-and-what-the-us-could-learn/

Ex-RBI Chief Flags Risks for India’s Overseas Borrowing Plan (7.13.19) Bloomberg https://www.bloomberg.com/news/articles/2019-07-13/ex-rbi-chief-rajan-flags-risks-for-india-s-overseas-debt-plan

The 2019 Annual Report of The Board of Trustees of The Federal Old-Age & Survivors Insurance & Federal Disability Insurance Trust Funds, Social Security & Medicare https://www.ssa.gov/OACT/TR/2019/tr2019.pdf

 

Central Banks

The US, Mexico, Thailand and other nations are lowering interest rates.  The EU is preparing a new expansive stimulus program which means more money printing, bond buying and lower interest rates, to be released in its September meeting.  Unlike the rest of the nations that raised their interest rates in 2017 and 2018, the EU has not raised interest rates since the 2008 crisis, and to make matters worse they are already at -.4% and are reportedly headed to -.6%.  Negative interest rates are a fiscal fantasy that shouldn’t exist.  They only serve to provide the EU with false legitimacy and solvency, when, in reality, they are insolvent and bankrupt.

ECB Primes Big Bazooka for September (8.15.19) WSJ

https://www.wsj.com/articles/ecb-stimulus-package-may-beat-expectations-official-says-11565876685

By Not Renewing the CBGA, Central Banks in Europe Look Ready to Buy Gold (7.26.19) https://www.bullionstar.com/blogs/ronan-manly/by-not-renewing-the-cbga-central-banks-in-europe-look-ready-to-buy-gold/

 

World Economy & Global Markets

German and EU economies are on the brink of recession, but other economies like the US, Australia and Switzerland are doing well.   Australia is set to triple its exports of grain-fed beef to China by 2030 to satisfy the nation’s growing appetite for the highly marbled meat, according to Rabobank Group.  CNN reported that “China’s economic growth has slumped to its lowest level in nearly three decades as the world’s second largest economy feels the effects of a prolonged trade war with the United States.”  The trade wars continue, as President Trump continues to attempt to deal with the trade deficit and open other countries to US markets.  The US is also investigating the Big Tech companies to see if they have acted unfairly, broken anti-trust laws and inhibited competition.

China’s Appetite for Australia’s Marbled Beef Is Growing (8.20.19)

https://www.bloomberg.com/news/articles/2019-08-20/grass-to-grains-shift-may-brighten-australia-beef-export-outlook

States to Launch Antitrust Probe of Big Tech Firms (8.19.19) WSJ

https://www.wsj.com/articles/attorneys-general-to-move-forward-with-antitrust-probe-of-big-tech-11566247753?mod=hp_lead_pos1

China’s Economic Growth Slumps to Lowest in 27 Years as the Trade War Hits (7.15.19) CNN https://www.cnn.com/2019/07/15/economy/china-gdp-growth/index.html

 

Political Unrest

Hong Kong protests continue; everyone is watching to see what China will do and President Trump is warning China to handle things wisely.  Italy’s Prime Minister will be resigning, ending the coalition government.  The EU bureaucrats may be rejoicing, but they could end up with an even more anti-EU replacement if they are not careful.  Tensions between India & Pakistan continue to rise and these two nuclear powers are being urged by world leaders to act with restraint.  Many believe that one of Russia’s nuclear missile depots exploded, as four monitoring stations went silent after the blast; as with most things that happen internally in Russia, all questions are met with no response.  China’s Huawei has been found to not only be spying on governments and countries which use it, but also to be helping Africa and other nations spy on one another.   It looks as if Canadian Prime Minister Trudeau may have damaged his re-election chances, having broken Canadian conflict of interest laws.  Both India and China are taking away freedoms and bearing down on their Islamic populations, with China literally placing entire Islamic town and village populations in internment facilities.

Italian Prime Minister to Resign, Declaring End of Coalition (8.20.19) WSJ

https://www.wsj.com/articles/italian-prime-minister-to-resign-declaring-end-of-government-11566310341?mod=hp_lead_pos3

Italian Politics Meet European Rigidity (8.21.19) Bloomberg

https://www.bloomberg.com/opinion/articles/2019-08-20/how-the-eu-should-respond-to-political-upheaval-in-italy?srnd=premium

Italy Stumbles Into Its Next Absurd Crisis (8.21.19) Bloomberg

https://www.bloomberg.com/opinion/articles/2019-08-20/italy-stumbles-into-its-next-absurd-political-crisis?srnd=premium

Trump Urges Restraint by India and Pakistan in Kashmir Conflict (8.19.19) WSJ

https://www.wsj.com/articles/trump-urges-restraint-by-india-and-pakistan-in-kashmir-conflict-11566261701?mod=hp_lista_pos4

Pakistan Extends Powerful Army Chief’s Term (8.19.19) WSJ https://www.wsj.com/articles/pakistan-extends-powerful-army-chiefs-term-11566239708

More Russian Nuclear Monitoring Stations Went Silent Days After Blast, Official Says (8.19.19) WSJ | https://www.wsj.com/articles/more-russian-nuclear-monitoring-stations-went-silent-days-after-blast-test-ban-officials-says-11566232680

Canada’s Trudeau Found to Have Broken Conflict-of-Interest Law (8.15.19) WSJ

https://www.wsj.com/articles/canadas-trudeau-found-to-have-broken-law-in-bid-to-aid-montreal-firm-11565801833

Huawei Technicians Helped African Governments Spy (8.14.19) WSJ

https://www.wsj.com/articles/huawei-technicians-helped-african-governments-spy-on-political-opponents-11565793017

India’s Modi Defends Decision to Clamp Down on Kashmir (8.8.19)

https://www.wsj.com/articles/indias-modi-defends-decision-to-clamp-down-on-kashmir-11565282857

After Detentions, China Razes Muslim Communities to Build Loyal City (3.20.19) WSJ

https://www.wsj.com/articles/after-mass-detentions-china-razes-muslim-communities-to-build-a-loyal-city-11553079629