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Government Data Unreliable; Elected Officials Unresponsive; PCE Ticks Higher, Inflation Out of Control

Friday, February 24, 2023, 9:13 am ET

Scarcely anything coming out of government or mainstream media is believable these days and government officials can't be bothered to respond to serious questions concerning their data, decisions and governance.

Economic data coming from government agencies like the Bureau of Labor Statistics (BLS), Bureau of Economic Analysis (BEA), and the Energy Department, among others, has been subjected to seasonal adjustments and wide-ranging revisions of late, so obvious that the data is being called into question by some of the top people in the investment community, including representatives from Goldman Sachs, UBS, and JP Morgan, people who are relied upon to analyse, react and make recommendations to clients based upon government details.

Republican Senators, including leader Mitch McConnell, loudmouth Lindsay Graham, and uber-RINO Mitt Romney refuse to appear on conservative talk show, Tucker Carlson Tonight to answer questions about backing and funding for Ukraine. Joe Biden, while he can travel clandestinely halfway around the world to deliver statements and speeches in Ukraine and Poland, but cannot be bothered with the environmental and humanitarian disaster in East Palestine, OHIO, nor can his Secretary of Transportation, Pete Buttigieg, who finally made an appearance three weeks after the event that continues to plague residents of Eastern Ohio and Western Pennsylvania, but appears to be more concerned about his image than the citizens of Ohio.

Beyond congressional refusal to enquire and investigate obvious allegations of election fraud in 2020 - their sworn duty - other than a few brave Republican House members, congress doesn't seem to feel a need to address the more pressing issues of the nation nor answer questions with straight answers. The White House briefing room has become nearly a daily comedy show for the international community. Many Americans are rightfully not amused, more angered at what some perceive to be deliberate destruction of the country.

Among the more alarming events of recent weeks is the Biden administration's taunting of China, accusing the country of supplying lethal weapons to Russia. Suggestions completely void of evidence or validation are sufacing from the usual sources, National Security Advisor Jake Sullivan and spokesperson John Kirby, in an effort to whip up anti-China rhetoric. Even Treasury Secratary Janet Yellen is getting into the act, warning China of " seious consequences" for aiding Russia or helping them circumvent sanctions.

China hasn't exactly been taking matters lightly, holding high-level meetings with Russian President Vladimir Putin and announcing an upcoming meeting between Putin and China's president, Xi Jinping.

The joke currently circulating posits that Biden has accomplished something no American president has been able to do, drive Russia and China together into a cooperative alliance.

Friday morning, China issued a statement outlining its position on the Russia/Ukraine conflict.

China's 12-point plan, which is light on details and lacking specific actionable positions, was straight-forward and to the point. Here is the link directly to Ministry of Public Affairs of the People's Republic of China being presented as China's Official Position on the Political Settlement of the Ukraine Crisis.

Besides pushing the doomsday clock closer to midnight and ignoring the legitimate concerns of its own population, the US federal government appears to have run completely off the rails, pursuing reckless, destructive policies, answerable to nobody, while the lapdog media lyingly conveys their message to the public.

Other than that, everything is fine in the land of finance.

Stocks have had issues in the current shortened week, opening Tuesday with heavy losses from which the major averages have not recovered. As of Thursday's closing bell, the Dow was down 672 points (-1.99%) for the week, the NASDAQ has shed 196 points (-1.67%), and the S&P is down 66 (-1.64%).

Earlier Friday, the Federal Reserve's favorite inflation measure, Personal Consumption Expenditures (PCE) deflator ticked up in January to 5.4% year-over-year from upwardly revised 5.3% (from 5.0%) in December, with the core rising by 4.7%. That sent stock futures, which had already been sloping negatively, into free fall, with Dow futures falling 365 points, S&P futures off 50, and NASDAQ futures sliding 215 points just a half-hour prior to the opening bell.

Overnight, Asian markets were mixed. European markets are trending lower, with Germany and France's major exchanges down by more than one percent.

Welcome to today's episode of the continuing global nightmare. Believe anything at your own peril.

At the Close, Thursday, February 23, 2023:
Dow: 33,153.91, +108.82 (+0.33%)
NASDAQ: 11,590.40, +83.33 (+0.72%)
S&P 500: 4,012.32, +21.27 (+0.53%)
NYSE Composite: 15,584.92, +54.10 (+0.35%)


Moderna, Domino's Pizza Fall Pre-Market; Bear Market Rallies Easily Spotted

Thursday, February 23, 2023, 9:09 am ET

Who would have guessed one of the companies that benefitted most from the virus panic - Moderna (MRNA) - would suffer when the "disease" was shuffled off, discarded, its usefulness as a means to control vast swathes of society fast becoming a dismal memory?

Well, Moderna announced fourth quarter earnings this morning, and while the company didn't simply disintegrate as some wish it would, its performance was far from optimal.

Profit tumbled 70% as COVID-19 vaccine sales fell and the drugmaker caught up on a royalty payment.

Moderna's cost of sales jumped nearly a billion dollars, including a $400 million payment to the National Institute of Allergy and Infectious Diseases (NIAID) tied to a new license agreement (Anthony Fauci could not be reached for comment).

Profit fell to $1.46 billion, or $3.61 per share and revenue dropped 29% to $5.08 billion. Moderna recorded $18.4 billion in sales from its COVID-19 vaccine last year, but revenue is expected to fall by nearly 75% in 2023, to around $5 billion. Shares are down 1-2% in the pre-market, but it is notable that Moderna once traded as high as 450 per share (September 10, 2021). Current price is around 158, a 65% decline. Good luck, dirtbags.

Love it or hate it, Domino's Pizza (DPZ) is one of the biggest pleasure-food purveyors in the nation.

Here's what Domino's Pizza reported, compared to Wall Street expectations, per Bloomberg consensus estimates:

  • Revenue: $1.39 versus $1.43 billion expected
  • Adjusted earnings per share: $4.43 versus $3.97
  • U.S. same-store sales: up 0.9% versus up 3.64% expected
  • Haters are out in force, with the stock down $30 (-8.74%) before the opening bell, to 318.

    Imagine, pharma company that produces shots that kill people, down one percent. Pizza company, down eight percent. Seems unfair, really.

    Online markets, eBay and Etsy both reported after the bell on Wednesday. eBay topped expectations by a penny and increased their dividend from 22 to 25 cents. Etsy missed EPS by three cents, returning 77 cents. In pre-market trading, eBay is down five percent, Etsy, up four percent. Go figure.

    A few notes about Tuesday's stock drop and bear market rallies in general are in order. Losses on the Dow, S&P and NASDAQ were the largest of the year, so far. As pointed out by one bear emerging from hibernation, "it's early."

    All three indices peaked on February 2nd and have traded lower since. This was a classic bear market rally. Anybody suggesting that the bear market which began in November, 2021 or January, 2022, is over, deserves a righteous throat punch.

    That February 2nd peak was shared by Amazon (AMZN), Alphabet (GOOG), eBay (EBAY), and was close to a top-out date for others tech stocks like Netflix (NFLX), Apple (AAPL), Nvidia (NVDA), and Meta Platforms (META). None are anywhere near the levels of three weeks ago. Bear rally, OVER.

    Bear market rallies are usually easy to spot and can last anywhere from a few days to a few months. They're typified by quick gains in stocks that were beaten down in prior months. They usually (almost always) end up below where they started, in the most recent case the Dow bottomed at 28,725 on September 30, the S&P was 3,577 on October 12, and the NASDAQ, which was really the fuel for the rally flame, was at 10,213 on December 28. Expect these averages to trend towards those lows over the ensuing few months.

    Profits can be made on both sides of these rallies and declines, but don't get greedy because they can turn on a dime. If you can snag 50% of the upside and downside and only be wrong once or twice, limiting with tight stop losses, you should be ahead of the game.

    At the Close, Wednesday, February 22, 2023:
    Dow: 33,045.09, -84.50 (-0.26%)
    NASDAQ: 11,507.07, +14.77 (+0.13%)
    S&P 500: 3,991.05, -6.29 (-0.16%)
    NYSEComposite: 15,530.83, -41.70 (-0.27%)


    Why Buy and Hold is DEAD; Whether Stocks Go Up or Down, You're Likely to Lose

    Wednesday, February 22, 2023, 9:04 am ET

    Tuesday's lopping off of some of the excess on various stocks and the indices representing the whole of them might just as well have been a gentle tap on the shoulder reminding anybody who has investments in funds that are somehow "locked up" or otherwise illiquid, such as IRAs, 401k accounts, et. al., that those investments are going to be ravished, if not by a significant decline in the price of stocks or indices, but by the silent theft of inflation.

    It's really pretty simple. If you own stocks in a portfolio, and, at the end of the year, you see that they're cumulatively up by six, eight, maybe 10 percent, you think you did OK, but, inflation may eat up half or more of your profit. Or all of it. Obviously, that was not the case in 2022, and it's looking like 2023 may not produce significant enough profits to beat inflation. Despite what the mainstream media and the government wants you to believe - that inflation is coming down, and will get down to close to the Fed's target of two percent some time soon - your direction should be directed to two charts referenced in Sunday's WEEKEND WRAP (below), specifically, USD inflation since 1970 and the 100 Year Historical Chart of the Dow Jones Industrial Average.

    Looking at the two charts side by side and focusing on the 1970s, it's very easy to see that the Dow declined from 6,585 to 2,504 from 1972 to 1982 and that inflation - using the BLS oft-criticized CPI for being too low - ran at an annual rate of more than six percent every year from 1973-1982 except for 1975, when it clocked in at 5.86%.

    If the US and most, if not all, of the Western economies have embarked along the same path with inflation running hot in 2021, 2022, and already in 2023, and stocks beginning their decline in November 2021, the next seven to 10 years may be quite painful on both accounts, with inflation roaring and stocks sliding.

    While his methodology is more precise, John Hussman of the Hussman Funds is expecting sub-par stock market returns over the same period, as he details in his roughly monthly market comments. According to Hussman, the result is the same, whether inflation persists or not.

    The best one can hope for is to escape the 2020s with some of your investments intact, inflation not having eaten away most of the profits, if there are any.

    Thus, the strategy of "buy and hold" is probably dead for the remainder of the decade. Another voice, that of Felix Zulauf, suggests investors buy and hold for shorter periods than normal, take profits, look for other opportunities to buy assets, and go short in down periods, a winning strategy would be to take out 70-80% of the upside and 50% of the downside. He also believes the average Joe will be poorer in 10 years than today. Ugh!

    The rally that began last October looks to have peaked on February 2nd. All of the indices have pulled back from that date's level, the S&P 500 by about 180 points and the NASDAQ by around 750. The Dow, which had peaked earlier (November 30, 2022) and has been rangebound since, is down 1460 points from that date. Incidentally, as of Tuesday's close, the Dow is down for the year.

    It's probably best to not get too deeply involved in market analysis at this point, as the preferred path might be to exit stocks completely or, if one must, to monitor positions closely, stay abreast of trends and avoid holding stocks for more than three to five months. The stock market's a roller coaster with an emphasis on coming down from the heights to lower levels.

    A good idea would be to at least trim allocations to stocks to below 50% in any portfolio. Forget the 60/40 old school set-up. Bonds, money market funds, and CDs may ameliorate the pain of inflation to some degree, but they're not likely to exceed it unless the Powell Fed goes full-Volker and raises interest rates to ungodly levels.

    People have been conditioned to own stocks for the past 70 years or longer, but more explicitly in the aftermath of the 2008-09 GFC. With the Fed now aggressively hiking rates, de-programing away from stocks would be rational and may save many from financial ruin. As always, gold and silver are currently solid bets going forward if only to preserve wealth, but, in an inflationary environment, so are tools, reliable vehicles, real estate, especially farm land, commodities, art, collectibles, and don't forget to keep the pantry stocked just in case. Should conditions shift away from inflation to recession or depression (though those are not mutually exclusive), the wherewithal and ability to make purchases at bargain-basement prices elevates cash.

    Keep this in mind:

    The study of money, above all other fields in economics, is one in which complexity is used to disguise truth or to evade truth, not to reveal it.
    -- John Kenneth Galbraith

    Thanks to Mike Maloney for including the above quote in his new book, "The Great Gold & Silver Rush of the 21st Century".

    Mike has made two chapters of the book available for free to the general public. There's no need to enter an email address or do any kind of sign-up. Just go to the site, GGSR21.com, and with a couple of clicks, you'll open the PDFs for chapters 3 and 4. The rest of the book is available on Amazon, but you'll have to pay for that, though it's likely to be money currency well spent.

    On the earnings front, Coinbase (COIN) beat revenue and earnings estimates, but saw transaction volume fall 12% from the third quarter to the fourth. Homebuilder Toll Brothers (TOL) also beat top and bottom. Both stocks are modestly higher headed for the open.

    After the bell, Nvidia (NVDA), Ebay (EBAY) and Etsy (ETSY) report.

    At the Close, Tuesday, February 21, 2023:
    Dow: 33,129.59, -697.10 (-2.06%)
    NASDAQ: 11,492.30, -294.97 (-2.50%)
    S&P 500: 3,997.34, -81.75 (-2.00%)
    NYSE Composite: 15,572.52, -267.63 (-1.69%)


    Stocks May Extend Losses This Week; Home Depot, WalMart Cautious on Future

    Tuesday, February 21, 2023, 8:40 am ET

    Other than the NASDAQ, which posted its sixth weekly gain of 2003 in seven, the major indices are coming off weekly losses, though not extreme.

    Shortened by Monday's Presidents Day holiday, the new week begins with dull overtones from two big retail outfits, as WalMart and Home Depot each reported quarterly results prior to the opening bell.

    WalMart (WMT) exceeded expectations, with total revenue of $164.05 billion, a 7.3% increase from last year and adjusted earnings per share at $1.71 for the quarter, topping the $1.51 average expectation for their fiscal quarter ended January 31. The company also raised its annual cash dividend by about 2% to $2.28 per share, but forecast the current year below previous estimates, citing a range of $5.90 to $6.05 per share for the year through January 2024, down significantly from estimates of $6.50. Shares of WalMart were seen down between three and five percent in the pre-market.

    It's very possible that WalMart is significantly overvalued after making enormous profits during the 2020-2021 pandemic. Sporting a price/earnings ratio of 45, investors may have to recalibrate the company's potential in a more open environment. The stock rose by more than 50% during the Covid crush, earning well above average returns in an environment in which much of their competition was shut down.

    Home Depot (HD) returned a profit of $3.36 billion ($3.30 per share) in the fourth quarter on revenue of $35.83 billion and told analysts to expect revenue to be stable for 2023, and a decline between three and six percent on earnings. Shares were off nearly four percent an hour prior to the cash open in New York.

    Stock futures are lower heading toward the open. Dow futures are off 315 points, NASDAQ futures down 126, S&P futures shedding 33 points. Asian stocks were mostly lower overnight and European stocks recovered from an early downdraft but remain in the red.


    WEEKEND WRAP: There's Only One Solution, and We Don't Have It; Hyper-Inflation, Currency Crisis Proceeding at Quickening Pace

    Sunday, February 19, 2023, 2:58 pm ET

    Ukraine is going to be overrun by Russia.

    It's only a matter of time... and countless lives that could have and should have not been taken. Like everything else concocted by the evil that exists, the condition in Ukraine that forced Putin's hand - the Maidan overthrow of the government, shelling of the Donbas for eight years, the build-up of Ukraine's military - it was not well-enough planned and poorly executed.

    Like COVID and the death-shot "vaccines", lockdowns, stolen elections, infrastructure demolition, and all the other plans by the elitist "cabal", WEF, UN, deep state, or whatever name one likes to apply to the ruthless progenitors of Great Reset, Build Back Better and other autocratic agenda, it all fails because all of these ideas stem from deeply flawed concepts put into play by weak-minded, essentially stupid people. They only partially succeed because much of the populations they wish to enslave are even dumber, number, distracted, and disorganized. Most people play along until their lives are ruined, their money spent, the will to resist extinguished by the overarching, corrupt power structure that intertwines government, big business, and banking.

    The solution is societal, political, and economic freedom and sound money. The Western developed nations have none of that. What Western Europe, the UK, Japan, and the United States have is a facade. Citizens are told they have freedom by a lapdog propagandist media parroting the dictates of the supposed leaders. Our currencies - euro, dollar, pound, yen - are poor substitutes for real money, gold, silver, and stores of value, commodities, and the ultimate facilitators of prosperity, energy, tools, and labor.

    This is the dilemma. This is the fight. This, the understanding that individual freedom as ensconced in the US constitution - life, liberty, the pursuit of happiness - is not granted by the government or a banking system based on infinite issuance of debt, but by hearts and minds of people working toward a common goal. We are only as free as we allow ourselves to be. Throwing off the yoke of oppression is an individual act always. One by one, step by step, it must be done because barring that, there is no reason to live.


    Stocks

    Players in the casino had an up and down week, but mostly, it was bumpy, stressful, and largely intractable. Monday was the only day of the week that all the majors ended higher. The remaining four sessions varied over pumping and dumping of certain stocks, the end result was a small down week for all but the NASDAQ, which posted its sixth weekly gain in seven for the year, up 69 points, a little more than one-half percent.

    For the record, the Dow Industrials have enjoyed only three weekly gains and four down ones in 2023, but the average remains on the plus side for the year, +2.05%.

    Earnings continued to be a mixed bag. Most companies showed fourth quarter and full year results ahead of estimates, though many are not growing revenues or profits on a quarterly or annual basis. Corporate America is caught in a funk, results skewed by disruptions from COVID, supply chain issues, inflation, rising interest rates, and reduced purchasing power. Consumer spending, which accounts for some 68% of GDP, has slowed or been flat when adjusted for inflation, even against the lower-end numbers implied by the CPI, a main focus of the week, January slowing to 6.4% year-over-year, hardly an improvement from December's reading of 6.5%.

    Much to the dismay of equity bulls, January PPI was up 0.7% over the prior month, a reading that prompted Fed presidents Hester and Bullard to declare that they favored a 50 basis point hike in the federal funds rate at the last FOMC meeting (Feb. 1) over the 25 basis points delivered, putting the rally that began the year in jeopardy. The Fed's reputation now tarnished a wee bit more than usual, voting members have until the ensuing FOMC meeting on March 22 to decide if they raise rates another quarter point or stun the market with a half-point hike, a move which may indeed be warranted, but which would nonetheless strike a severe wound to equity and credit markets.

    Stocks and the economy face a critical juncture in weeks and months ahead. Looking out through June, the main risks are three FOMC meetings (March, May, June), continued stubborn inflation making its way through assorted goods and services, hints of recession, the evolving situation in Ukraine, and an employment market that is either too tight or distinctly divergent from what massively adjusted government numbers are projecting.

    The labor market is the odd fellow out in the current discourse. According to non-farm payroll data, January hiring appeared to be trending vigorously hot (+517,000), but layoffs continue, albeit at a slow pace, though various furloughs are not being represented in initial claims, which continue to track below 200,000. It's a condition that warrants a deeper understanding of what's driving the economics and serious input from the Fed's regional centers. Life may be good in some parts while ugly in others. The Fed's task, to piece together data from disparate sources will be challenging and possibly difficult to explain cogently.

    With the rally that has extended from the start of the year being composed mostly by formerly shunned tech offerings, stocks may be hitting the rocks soon. The NASDAQ may have topped out on February 2nd when it closed at 12,200.82, a five-month high. Two successive attempts to rally above that level have failed. A third try, from an even lower level, may possess more churn than charm. Lower lows and lower highs are current signatures of the indices, with the Dow Industrials essentially flat-lining since early November.

    The upcoming week will be short on sessions since Monday (Presidents Day) is a holiday, light on data, and highlighted by earnings stragglers.

    Fourth quarter earnings are reported Tuesday (2/21) by retailers Walmart (WMT) and Home Depot (HD), along with Caesars (CZR), Coinbase (COIN), and Toll Brothers (TOL).

    Wednesday, earnings come from TJX Companies (TJX), Nvidia (NVDA), eBay (EBAY), and Etsy (ETSY).

    Thursday: Alibaba (BABA), Moderna (MDNA), Wayfair (W), Domino's (DPZ).

    Friday winds down with only a few notable reporting before the opening bell, including Taboola (TBLA) and Cinemark Holdings (CNK).

    Could be a good week to reassess, re-evaluate, and reallocate.


    Treasury Yield Curve Rates

    Date 1 Mo 2 Mo 3 Mo 4 Mo 6 Mo 1 Yr
    01/20/2023 4.69 4.64 4.72 4.75 4.80 4.68
    01/27/2023 4.61 4.64 4.73 4.76 4.81 4.68
    02/03/2023 4.61 4.67 4.70 4.80 4.82 4.79
    02/10/2023 4.66 4.77 4.79 4.89 4.89 4.89
    02/17/2023 4.64 4.81 4.84 4.95 4.99 5.00
    Date 2 Yr 3 Yr 5 Yr 7 Yr 10 Yr 20 Yr 30 Yr
    01/20/2023 4.14 3.83 3.56 3.51 3.48 3.77 3.66
    01/27/2023 4.19 3.90 3.62 3.58 3.52 3.77 3.64
    02/03/2023 4.30 3.96 3.67 3.61 3.53 3.77 3.63
    02/10/2023 4.50 4.19 3.93 3.86 3.74 3.96 3.83
    02/17/2023 4.60 4.33 4.03 3.95 3.82 4.01 3.88

    A 5-handle finally appeared on the official Dept. of the Treasury Daily Treasury Par Yield Curve Rates as the one-year note touched the mark, the first instance of any yield at 5.00% or higher since August 22, 2007, when the 20-year bond boasted a yield of 5.01%.

    It's been a long time - more than 15 years - since yields were anything approaching normal, but surely this is a sign of an evolving credit and currency regime. Some of the hot-shots currently employed on Wall Street were still in grammar school at the time, so investors may be reminded to never take financial advice from anyone younger than yourself. They just haven't seen enough or know enough about the past to accurately predict the future, which, in fact, nobody can realistically do with any consistency.

    Yields on six-month bills and one-year notes traded above 5.00% during the week, though only intraday. Friday was the first time the Treasury actually posted a five and should lead to more of them showing up as the Fed continues its tightening exercise. It bears repeating that in 1980 Paul Volker eventually hoisted the federal funds rate as high as 20%, a record, to slow down an overheated economy and tamp down inflation. It worked, but not before inflation was 11.35% in 1979 and 13.5% in 1980 and that followed eight of the preceding nine years in which inflation exceeded four percent, the only year below that level 1972, when prices rose only 3.21% (see chart from link above).

    In 1971, Nixon closed the gold window, an actual default on US obligations to convert dollars to gold, jump-starting the painful inflation of the 1970s. A lot of people suffered and fortunes were wiped out during that time. Not only was inflation silently reducing purchasing power, while prices for everything were going up, stocks were being hammered.

    In January, 1966, the Dow Jones Industrial Average peaked at 9,252. By August of 1972, a year after Nixon defaulted, it had fallen to 6,585 and it continued to decline until reaching a bottom of 2,504 in June, 1982, a top-to-bottom loss of 73%. Seventy-three percent! Now, that's a bear market. It took another 13 years - October 1995 - for the Dow to regain its previous high, aided by gains in productivity and breakthroughs in technology (personal computers, advanced communications, high level industrialism).

    $100 in 1971 had the purchasing power of about $45 in 1980, just 10 years later due to currency debasement, neatly disguised as inflation. The value of the US dollar had been cut in half right after Nixon obliterated what was left of Bretton Woods and the gold standard.

    There's no secret to this. One can readily go on the internet or in old magazines and look up prices for cars, or food, or other common retail items from 1969, 1970, and 1971 and compare them to prices in the early 1980s and again to today. Prices got so out of hand most car ads in magazines stopped posting prices in 1985. Today, very few car ads on TV or print have the nerve to show the price, preferring to push "savings" and low interest rates (for qualified buyers... very few of those left). When pickup truck ads boast savings of $2500, $4500 or more, rest assured that hunk of metal is going to retail at well over $45,000. It's insanity.

    Putting the inflation and stock market charts side-by-side, one might reasonably assume that the current inflation may be only beginning and that prices are about to go vertical over the next 3, 5, 7 to 10 years as the US dollar loses the final two percent of its value. Stocks, currently overvalued by orders of magnitude similar to levels prior to the 2008 sub-prime, 2000 dot-com, and 1929 economic crashes, may be about to collapse.

    The triple-whammy of hyper-inflation, collapsing asset values, and currency debasement are all inter-related. Anybody with a solid understanding of cycles has to be pretty concerned at this time, though those same people have probably been preparing since 2008, if not prior to that.

    The Fed's tightening and crimping of the money supply will eventually lead to multiple crises, but, it's only because the very same Federal Reserve spent the last 14 years (since 2009) pumping up the economy and the money supply through quantitative easing (QE), zero interest rate policy (ZIRP) and exacerbated already unstable, unsustainable conditions by ramping the money supply during the pandemic.

    Excessive government spending forced year after year of deficits, growing the national debt to over $31 trillion. Now, the government faces a crisis with a fight over raising the debt ceiling, suggesting that the the US Treasury is aiming for a default by June or as late as October. Already, interest on the debt looks to approach or exceed $1 trillion in the current fiscal year, if congress and the administration don't come to terms. Biden, the current White House occupier, says he'll veto any pullback in spending. The Republican-led House of Representatives wants cuts and compromises. A showdown is soon to come.

    Perhaps the House can save the day, cut government programs, save some money, and declare victory before the entire economic house of cards tumbles down. No matter what they do, even to the point of overriding a veto, it's unlikely to be enough. There may be a solution, albeit an unlikely one. Read on; we're getting to it.


    Oil/Gas

    WTI oil priced Friday afternoon in New York at $76.56, down from $79.76 at the New York close the previous Friday (2/10). Compared to all the other pressing issues, oil prices have become a side show. Currently, supplies are of ample quantity worldwide. Russia is supplying China, India, and its neighbors to the south and east, even into Africa. The middle east OPEC nations are keeping crude flowing to the Americas. The US, Canada and Mexico have enough of their own oil in the ground and in reserve to supply themselves for years, if need be. Oil supply is not really an issue. Falling demand is. Economies are slowing on a global basis and can be taken as an early warning sign of worldwide recession, depression and an eventual, 100% assured currency crisis.

    Prices at the pump continued to fall ever so slightly this week. Gasbuddy.com reports the national average at $3.36, down five cents from last week ($3.41). Colorado ($4.08) joined Nevada ($4.10) California ($4.64) and Washington ($4.06) as the only states averaging above $4.00. In the Northeast, Pennsylvania continus the region's highest, at $3.68.

    The Southeast continues to enjoy the lowest prices, led once again by Texas, up two cents to $2.98, and Mississippi. Close to the $3.00 mark are South Carolina ($3.02), Oklahoma ($3.03), Louisiana ($3.04) and Arkansas ($3.04).


    Bitcoin

    This week: $24,680.90
    Last week: $21,797.10
    One month ago: $21.084.00
    One year ago: $38.398.00
    Two years ago: $56,104.90
    Three years ago: $9,668.23
    Four years ago: $4,110.00
    Five years ago: $11,432.50

    Meh. Could this be a scam?

    If it's a currency, which it is purported to be by the crypto-evangelists, it's an unstable one. As a store of value, it doesn't inspire much confidence.

    Bitcoin is nothing more than an idea based upon a technology known as blockchain. The technology is perfectly sound. Its derivatives, be it bitcoin, NFT, stable-coins, or any of the thousands of imitation alt-coins, are flawed, some deeply.

    Besides the obvious faults, the exchanges want a piece of the action, governments want to tax anything that even hints of "crypto", and thieves are scouring the internet for their next victims.

    Overall, bitcoin and the rest of crypto-land can go straight to hell. None of it is even good for speculation. There are bad actors galore and most governments are all over it like ants on spilt jelly. Crypto is just another way to separate people from their wealth, which is at the core of corruption in government. They hate you.

    Did you check yes or no on your 1040:

    At any time during 2022, did you: (a) receive (as a reward, award, or payment for property or services); or (b) sell, exchange, gift, or otherwise dispose of a digital asset (or a financial interest in a digital asset)?

    Notice that the question does not ask if you purchased any digital assets. According to the IRS overlords, it's perfectly fine to spend fiat bucks on cryptos. They'll catch up to you when you sell. Chances are currently good that when you do sell your precious crypto, it will be worth less than what you paid, as will be the currency you receive. Unless you're looking for a tax loss, this is known as a LOSE-LOSE situation.

    For those still wondering, crypto gains are taxed at the same rate as income, 0% - 45%, depending on how long the asset was held and individual tax brackets.

    Stay far, far away from this garbage.


    Precious Metals

    Gold:Silver Ratio: 84.61; last week: 85.25

    Gold price 01/20: $1,944.50
    Gold price 01/27: $1,943.90
    Gold price 02/03: $1,877.70
    Gold price 02/10: $1,876.40
    Gold price 02/17: $1,851.30

    Silver price 01/20: $24.06
    Silver price 01/27: $23.73
    Silver price 02/03: $22.40
    Silver price 02/10: $22.01
    Silver price 02/17: $21.88

    Here's the solution to everything, though getting there may be a tall task for millions, if not billions of people. Gold and silver have literally been MONEY for thousands of years. Those who hold stores of it do so for good reasons, of which there are many, not the least of which being stores of value.

    Despite the games played in the derivative markets, gold and silver are recognized as money throughout the world. A number of economists and pundits - most notably James Rickards - have suggested the Federal Reserve and other central banks revalue gold to $5000, $10,000 an ounce or even higher. The gold held by the Fed is currently booked at $42.22 an ounce. Revaluing it to at least the current range of $1800 to $2000 seems to make sense, but, at that level, gold would cover less than 10% of money in circulation, and that assumes all the gold in Fort Knox is still there, unleased, and not re-hypothecated. Fat chance. Sorry, bub, all your gold belong to us.

    Thus, it's not practical or practicable and nobody is seriously considering do such... except for Russia and China, and maybe Saudi Arabia, India, most of Africa and South America. In other words, the rest of the world (ROW) outside the Western hegemons of the US, UK, EU, and Japan are looking at alternatives to dollar dominance as the reserve currency. The BRICS+ nations have already announced that studies are underway towards an alternate commodity-backed reserve currency. They have been actively buying gold for decades and central bank purchases have ramped up even higher recently.

    The issue, for most Americans, Canadians, Brits, Europeans, is that their central banks aren't about ready to jump on the gold bandwagon. They're perfectly content with promoting their debt-based currencies, printing even more of it and impoverishing their citizens for the foreseeable future. After all, what is that military situation in Ukraine all about? Democracy? Freedom? Defeating the evil Russians? Of course not. It's all about money and nothing else. The West is threatened by Russia, China, et. al., and responded the only way they know how, with weapons, death, and destruction. They're not excited about their currencies being thrown into the dustbin of history as have all fiat currencies, ever.

    Any way you slice it, Americans and all Western nations are in for a rough go the next five to seven years, maybe longer. The East is advancing while the West destroys itself. It's as simple as that, so, the sooner one swallows hard and accepts the truth, the better one may be. Thanks to dollar hegemony, central banks, the LBMA, the CME, and the COMEX are practically begging people to buy gold and silver at these prices. That's not to say the price of gold and silver are going to skyrocket, but, rather, the value and purchasing power of the dollar, yen, euro, pound, and any other currency not backed by something tangible are falling and will continue to do so on an accelerated basis.

    Goldmoney.com's Alasdair Macleod has deeper insights.

    This is how Money Daily has been leaning for years, and today, we're over the cliff.

    Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping included):

    Item/Price Low High Average Median
    1 oz silver coin: 35.00 50.00 40.88 38.98
    1 oz silver bar: 30.35 49.00 37.15 36.17
    1 oz gold coin: 1,935.79 1,972.90 1,959.70 1,966.12
    1 oz gold bar: 1,901.00 1,967.89 1,933.57 1,929.83

    The Single Ounce Silver Market Price Benchmark (SOSMPB) took off again this week, rising to $38.30, a gap higher of $2.12 from the February 12 level of $36.18.

    Don't disregard the prices on eBay as excessive or otherwise untrustworthy. Many of the prices seen on the weekly Sunday morning surveys are from of the big dealers on the internet. The consistently high range is representative of the difference between the fixed spot or COMEX prices and the added costs of shipping, refining, and producing smaller coins and bars plus ebay's selling fees of roughly 15%. The sellers and dealers are profit-driven, buyers readily paying much more for graded, numismatic items to a point at which even the plainest of bars and coins will command extreme premia.

    Like central banks, Money Daily doesn't do this because gold and silver are shiny and pretty, although there's some merit to that. It's because gold and silver are real money and currency is just currency. It's a happy day to trade near-worthless scraps of paper or electrons on a computer screen for items of tangible, real value.


    WEEKEND WRAP

    The world is going through a transition and it's not going to be easy on anybody. Looking at current political, social, and economic conditions without bias is a difficult task that few entertain and even fewer wish to consider. It's apparent to anybody who breathes, eats, works, drives, or has to heat a home that the period since February 2020 has been among the most difficult and challenging anybody can remember. Hard-core realists take the point of view that conditions have a very high probability of getting even worse.

    Sorry, but that's where we're at.

    At the Close, Friday, February 17, 2023:
    Dow: 33,826.69, +129.84 (+0.39%)
    NASDAQ: 11,787.27, -68.56 (-0.58%)
    S&P 500: 4,079.09, -11.32 (-0.28%)
    NYSE: 15,840.16, -33.63 (-0.21%)

    For the Week:
    Dow: -42.58 (-0.13%)
    NASDAQ: +69.15 (+0.59%)
    S&P 500: -11.37 (-0.28%)
    NYSE Composite: -70.54 (-0.44%)


    Disclaimer: Information disseminated on this site should not be construed as investment advice. Downtown Magazine Inc., Money Daily and it's owners, affiliates and/or employees are not investment advisors and do not offer specific investment advice. All investments have risk. You should consult a professional investment advisor or stock broker or use your individual judgement when making investment decisions. By viewing this site, you hold harmless Downtown Magazine Inc., Money Daily, its owners, affiliates and employees against any and all liability. Copyright 2023, Downtown Magazine Inc., all rights reserved.

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