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Money Daily has been providing business and financial market news, views, and coverage on a nearly continuous basis since 2006. Complete archives are available at moneydaily.blogspot.com.

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12/06-12/12/2020
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7/20-7/26/2020
7/13-7/19/2020
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6/15-6/21/2020
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3/30-4/5/2020
3/23-3/29/2020
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Lamenting Congress and Dollar Flight

Friday, December 18, 2020, 8:12 am ET

As the congress cretins prepare to promise another day's worth of "progress" on the continuing negotiations over the long-awaited COVID-related stimulus or relief package, your average American and intrepid investor (not the same) are getting a little bit tired of hearing the same line touted over and over again as it has been for many months.

There's been so much accumulated progress toward meaningful legislation to dole out money to the plebes and other, more financially-needy institutions that Americans should have already received the dough and spent it by now. Instead, the disinclination by congress to pass along a bit of taxpayer riches to the downtrodden and beleaguered middle and lower castes of folks has caused not a little bit of consternation and dilution of bank balances, credit facilities, piggy banks, and coins found in couch seats.

Millions are lining up at food banks because they can't afford to eat properly, yet the idiotic Democrats and resistant Republicans insist upon hammering out their differences over months of tiresome news bites and plain old incompetence. All of it is making for very bad theater and stressing the economy closer to a breaking point.

Meanwhile, anybody with money or significant assets has been literally heading for the hills, bugging out, getting away from cities and out of harm's way, not so much from CV-19, but from the mass hysteria that has taken place over the past nine months. The number one way to stay safe from pandemics and people is to get out of Dodge, as it were, and number two is to turn off the television and its preaching of utter nonsense, lies, propaganda, and the occasional sporting event (attended by few fans, which is a shame, and unnecessary).

Stocks continue to be purchased with appropriate reckless abandon, as though the binge-buying will never end. Some larger hedge funds and investment houses have opted for crypto-currencies, now that Bitcoin has surged to record levels and looks like an asset - and a currency - that cannot be undermined, manipulated, or controlled by governments or other nefarious folks.

For those with the head for it, Alasdair Macleod's latest offering at goldmoney.com is entitled, The Next Dollar Problem Has Just Arrived, citing flight from dollar-demoninated assets heading straight into stocks, gold, silver, and, especially, cryptocurrencies, like Bitcoin, Etherium, and others.

It's all getting just a little bit too much to bear as most Americans are so weary of the CV-19-related news, dubious government mandates and scare tactics, they've almost forgotten that the presidential election is still being contested and that Joe Biden may actually not have won the November 3rd contest, which, incidentally, was extended b some states counting votes as late as a week or more later.

Congress will almost certainly pass a short-term funding measure on Friday to keep the government operational at least until Tuesday of next week, prompting the obvious question: Is this any way to run a country?

It's not, and the political class should be ashamed of themselves, though we all know they won't be. They think they're doing some kind of public service, delivering a Christmas miracle, like the vaccines that half the country won't take.

It's enough to make one sick. Oh, wait...

At the CLose, Thursday, December 17, 2020:
Dow: 30,303.37, +148.83 (+0.49%)
NASDAQ: 12,764.75, +106.56 (+0.84%)
S&P 500: 3,722.48, +21.31 (+0.58%)
NYSE: 14,516.73, +107.80 (+0.75%)


Congress Fiddles As America Burns; Fed Re-Confirms QE Infinity; Bitcoin Rockets Higher

Thursday, December 17, 2020, 9:13 am ET

Legend has it that Roman Emperor Nero "fiddled while Rome burned."

While the story has largely been disproved (or debunked, in today's parlance), primarily because the viol class of instruments wasn't invented until the 11th century and the six-day fire that engulfed Rome occurred in 64 AD. Nero couldn't have been fiddling, but he almost certainly was diddling his lute.

Still, the story has survived the ravages of time, as testimony and warning of the wantonness and indifferent attitudes of kings and queens, monarchs, rulers, and tyrants. Those who hold power rarely embrace the cares of the common folk; more often than not, they labor relentlessly to thwart the will of the people and enslave their subjects.

So it is that humanity has evolved over the eons to reduce the self-centered interests of sociopathic governors and emperors, to spread it around in parliamentary fashion, to a select group of immoral heathens commonly referred to these days as politicians. Instead of one evil monster leading a nation to ruin, there are many charting the path of destruction, willingly unconcerned with the future other than their hold on power.

That's what we have in the US congress today. With few exceptions, congress consists of 100 senators and 435 members of the House of Representatives, a grand and glorious total of 535 "Neros" fiddling madly as the nation - literally and figuratively - burns. As if the looting and arson in cities across America this past summer wasn't enough destructive entertainment for the privileged class, they've continued their tortuous ways by tempting the citizenry with promises of "relief" and "stimulus."

They've played their twisted game since July at least, when Nancy Pelosi, Chuck Schumer and Treasury Secretary Steven Mnuchin held breathless negotiations over a second round of CV-19 relief, promising aid to the unemployed, the aged, families, businesses, and even many of their close friends and supporters.

To date, some six months later, they've produced nothing of the sort, and now, we are learning that there is likely to be further delays past the temporary Friday deadline, because, as we all know, the political class has to approve a spending bill by that date, as funding the continuation of their precious government fiefdom has taken precedence over providing even the smallest comfort to the ordinary citizen.

The New York Times, that beacon of everything suspicious about the marriage of media and government, reports that majority leader Mitch McConnell has told colleagues to plan on remaining in Washington into the weekend, delaying the highly-anticipated departure from their duties for a two-week holiday. Poor babies.

They've had months to put together a bill to help the American people, and yet, they still can't muster the where withall to spend money that they don't have on people they obviously don't respect. A pox on all of them and their houses. Happy Holidays, indeed.

While the feckless misanthropes in the Capitol building were dithering and whining Wednesday, the FOMC of the Federal Reserve (the private central bank that issues non-constitutional currency) ended their final meeting of the year with their usually-brief statement that included the usual boilerplate about inflation targeting at two percent and full employment, along with this gem:

...the Federal Reserve will continue to increase its holdings of Treasury securities by at least $80 billion per month and of agency mortgage-backed securities by at least $40 billion per month until substantial further progress has been made toward the Committee's maximum employment and price stability goals.

In case one is unfamiliar with the Fed's twisted verbiage, Chairman Jerome Powell and his cohorts plan to continue quantitative easing (QE) - aka money printing - by buying up $80 billion a month in Treasury bills, notes, and bonds, and another $40 billion in mortgage-backed securities (MBS) ...forever, or, at least until such time as the world awakens to their massive counterfeiting scheme and rejects the US dollar as the world's reserve currency or as currency at all.

Such awakening may be already underway, as, on the same day that the congress delayed and the Fed assuaged markets with bounties and pallet-fulls of filthy lucre, the untethered cyrpto-currency known as Bitcoin rocketed to new all-time highs, absolutely screaming past the old level of $19,950, to as high as $23,776.94 overnight, showing no sign of relenting in its ascent.

The blockchain powered alternative currency is now being embraced by the titans of Wall Street. Investment houses and hedge fund managers are buying in as never before, boosting the value of the non-debt-based currency in the face of unrelenting global currency debasement. As long as the Fed and ECB continue their profligate ways, Bitcoin promises to attract more users, more investors, at higher and higher levels.

It's not so much that Bitcoin is rising in value, as the comparative currency, the US dollar, is losing all of its own. Intent on diluting the money supply, the central banks have embarked upon the end-game voyage to the eventual destruction of all fiat currencies, and it's happening with a swiftness toward a crashing upon the shoals of insolvency unseen until these past few days.

Currency destruction, be it by hyper-inflation, imploding deflation, or just plain mismanagement, usually takes years, decades. Well, the Fed's been at it for over 100 years. Since 1913, they've been the sole issuer of the currency that has lost 97% of its purchasing power and is now on a course to eviscerate the final three percent. The Fed has a running start and assistance from the federal government, which, despite their seeming unwillingness to craft bills to waste away the currency, will eventually find a way to blow all of it into a financial black hole.

As the dreadfully Kafkaesque year of 2020 comes crashing to a close, 2021 promises more insanity in financial markets and Mad Max styling for the general society. There will be a banking crisis which will be characterized as a liquidity event but will, in reality, be one of solvency. Some, probably many, banks will fail. The Federal Reserve's balance sheet will enlarge to gargantuan proportions. They've already assured themselves of at least another $1.44 trillion ballooning via their QE measures, and that certainly will not be enough to stem the onslaught of fiat debauchery. They only know how to print and print more. They have no other plan. The end is in sight.

And, just in case anyone was unaware of how badly the economy is failing, another 885,000 people filed initial unemployment claims last week, up from a revised 862,000 during the prior week.

Merry Christmas? Happy Kwanza? C'mon, man, get with the new normal. The new fake president has promised to "Build Back Better," whatever that means. America, and, lest we forget, Europe, with their endless Brexit deliberations that will never be amicably resolved, are circling the economic drain, soon to be flushed.

Huzzah!

At the Close, Wednesday, December 16, 2020:
Dow: 30,154.54, -44.77 (-0.15%)
NASDAQ: 12,658.19, +63.13 (+0.50%)
S&P 500: 3,701.17, +6.55 (+0.18%)
NYSE: 14,408.94, +6.62 (+0.05%)


Stocks Rip Higher; Bitcoin Makes All-Time High; Gold, Silver On the Move

Wednesday, December 16, 2020, 9:10 am ET

Getting the most out of scant headlines, stocks managed to take the rollout of the Pfizer vaccine (Monday) and the "progress" in congress toward a COVID-19 relief or stimulus bill (actually, little to no progress) as exceptionally good news, enough to push stocks higher Tuesday after a forgettable prior week which saw all of the major indices in decline.

The good news for investors in equities was that the one-percent-and-change advances put all the averages close to record closing high levels. What may be troubling to some of these stock market perma-bulls is that silver, gold, and Bitcoin - all alternative currencies to the falling US dollar standard and all of which have out-performed all the major averages except the NASDAQ - were also on the move, posting solid gains, poised to go even higher.

After the New York close and overnight, gold, silver and Bitcoin all added to their Tuesday wins as stock futures searched for headlines with which to goose stock futures toward a positive open.

Taking nothing away from the tried and true investing karma of holding bits and pieces of publicly-traded companies, mutual funds, ETFs or even whole index funds, it's valuation and counter-party risk that may eventually chink the armor of traditional investment schemes. P/E ratios of some individual stocks are at what some regard as nose-bleed levels. Simply put, with an economy running on CV-19 vaccine vapors, hope for a smooth transition of power in Washington (good luck with that one!), a masked, stressed, and nutrion-deprived populace, and a media narrative reliant on lies, half-truths and censorship of factual information, investors in just about any asset class have reason enough to be a little bit cautious.

It's not like stocks other than tech companies like Facebook, Apple, Amazon, Google, and companies that have thrived under the lockdown scenario like UPS, Fedex, Target, and Wal-Mart have not performed well in 2020. The concern is that the number of positive stock stories is dwarfed by the cataclysmic collapse of other whole sectors, like airlines, hospitality, retail, and energy, marking the upside rally since the end of summer a thin one, in that a few stocks have benefitted handsomely while the rest of the market has stagnated or fallen apart.

That scenario had been evident in the initial stages of the rally off March lows, but has moderated of late, with most-shorted stocks and riskier issues now picking up the slack in the advance-decline ratios, indicating that the breadth of the rally may be finding a healthy sweet spot. From a broad overview perspective, this looks good, as stocks should during what is usually one of the best months for overall market gains, December, but, as 2020 comes to a close, investors may be thinking about tax implications, though the January Effect (From 1928 through 2018, the S&P 500 rose 62% of the time in January (56 times out of 91)) may provide comfort for the wall-of-worry weary.

From a contrarian - gold bug, silver surfer, or coin hodler - perspective, what the stock market does in relation to the alternatives is paramount. While the NASDAQ has performed admirably, up more than 37% year-to-date, the Dow and S&P are pikers by comparison, up roughly five and 14 percent. Gold (+17%), silver (+33%) and Bitcoin, up a whopping 270% and still rising, appear to be on course to take top honors for 2020.

What the end of the year and 2021 bring for investors is all loaded in Santa's bag, largely dependent on confidence (or lack thereof), geo-political events, and conformity to the "new normal" foisted upon the planet by CV-19 and the "Great Reset" memes.

It's a real grab-bag of assets and asset classes competing over a three or four dimensional chessboard. Not all asset classes can gain or lose at the same time, though this coincidence happens more often than one would normally expect.

And, just like that, at 8:45 am ET, Bitcoin rocketed to a new all-time high at $20,420.00.

Hold onto your hats and buckle up those seatbelts. The final trading days of the year may be the most interesting of all.

Happy Holidays!

At the Close, Tuesday, December 15, 2020:
Dow: 30,199.31, +337.76 (+1.13)
NASDAQ: 12,595.06, +155.02 (+1.25%)
S&P 500: 3,694.62, +47.13 (+1.29%)
NYSE: 14,402.32, +187.39 (+1.32%)


Congress Rushing To Pass Stimulus and Spending Bills and Get Out of Town; Here's Hoping They Don't Return

Tuesday, December 15, 2020, 7:30 am ET

Both houses of congress plan on leaving the Capitol for a two-week holiday by Friday and the American people should welcome their departure in hopes that they stay away longer. Sadly, both houses plan on being in back in session by January 3rd.

The feckless preeners who believe they actually have a grip on the country's well-being are set to take their annual Christmas and New Year vacation beginning Friday, December 18, though, as usual, they have plenty of unfinished business to complete before than.

First, they need to make sure there's a government to run when they return. Last week, they passed a short-term funding bill to keep the government operating for a week. The money from that measure runs out on Friday, so they're looking at another $1.4 trillion package that would keep the government in business for three or six months or until they need to go to the Fed to borrow more money they can't raise by taxing the citizenry (which, by the way, is largely broke and not in much of a mood to fund more government spending escapades).

Additionally, since they've been wallowing in their own self-adulation for the past six months over getting re-elected (most did, some did not), they've failed spectacularly on coming up with a second huge stimulus bill which was promised in August. Or September. Or October. OK, maybe November. Ah, it's December.

The current status is about the same as it's been for the past six months. They're getting closer. Maybe. While the price tag seems to be pretty much agreed upon at $908 billion, the latest scheme now features two bills, one that includes all the things the bickering sides (House Democrats and Senate Republicans) can agree on and another that features the two main sticking points: the Democrats favored aid to cities and states and the Republican push for a shield against pandemic liability for employers (purportedly only those with 500 or more employees). The smaller measure has a price tag of $160 billion.

The larger, $748 billion proposal, includes a jumbo pot of money for extended unemployment benefits (16 weeks at an additional $300 per week), $300 billion in small business relief, and $16 billion for coronavirus testing and vaccine distribution. The bipartisan bill also provides billions of dollars more in funding for emergency food assistance, education and bailouts for airlines, and money for Amtrak and public transit, which is odd since people have been told not to travel much during the holidays.

Altogether, the two bills throw more money the government doesn't have towards problems they are largely responsible for creating. Americans would likely be better off if the two sides continue bickering and get nothing accomplished (par for the course for the past 40 years), leave town and never return. At first blush, we'd save about $2.4 trillion and not be tortured by inane comments like Dick Durbin's:

"Weeks have passed, hours and hours of Zoom calls and we've reached this point. It feels good, it feels like legislating, it feels like why we were elected."

or, John Cornyn's:

"We've got to vote on this thing by Friday and get out of here."

What the latest iteration of stimulus spending leaves out is another round of checks to working class Americans. Neither bill contains a provision for $1200 checks, or $600 checks or even $12 checks. While congress picks winners and losers, they apparently feel justified putting ordinary citizens in the loser column. Well, thanks for showing us all what you really think of the people who vote for you.

Senators Bernie Sanders (I-VT) and Josh Hawley (R-MO) are pushing for $1200 checks to individuals, $2400 to married couples and $500 for each dependent. So too is President Trump, who has voiced a preference for the stimulus checks and could possibly veto any proposal that doesn't include direct spending on individuals. The president tweeted Monday that he would like to see direct checks of $2000.

Members of congress might have the 2/3rds majorities in both houses to override a veto, but nobody is really considering that possibility. After all, the pampered politicians might have to spend another day or two working on the "people's business" which they've neglected for the past six months.

These people seem to like feeling important. Their drama queen status is being furthered by their own deadline, predicated on taking a two-week vacation, the absolute height of haughty, self-indulgent, narcissistic behavior.

There's almost no chance that the assembled idiots won't get a stimulus bill and spending bill done in time to make their flights out of town to spend the holidays with their families while telling the rest of us to keep working until Christmas Eve and through the week before New Year's, and, by the way, don't celebrate with any more than six of your friends and family.

They have no shame, no principles, no integrity.

They've waited and waited and stalled, and posed, and strutted like horny roosters for months, done close to nothing and want everybody to notice their grand accomplishments which include a national debt approaching $27.5 trillion, a wrecked economy, rushed vaccines for a disease that does less harm than the seasonal flu, and most of them on the take from big pharma, big banks, big business in general, and big China.

The American people would largely be better off without them.

At the Close, Monday, December 14, 2020:
Dow: 29,861.55, -184.82 (-0.62%)
NASDAQ: 12,440.04, +62.17 (+0.50%)
S&P 500: 3,647.49, -15.97 (-0.44%)
NYSE: 14,214.93, -140.36 (-0.98%)


WEEKEND WRAP: Bitcoin Up 269.84% in 2020, Followed by NASDAQ (+37.95%), Silver (+32.87)

Sunday, December 13, 2020, 9:48 am ET

With Christmas just 12 days away, let's just forget everything bad that the year 2020 has wrought and focus on the good things happening in the United States of America. It's probably a good barometer for much of the rest of the world, as the Us is still the leading economy with one of the highest standards of living.

We're waiting...

More than 99% of the population that started 2020 alive and breathing, still are. The annual number of deaths in the US is right around 2.8 million with a death rate of roughly 850 deaths per 100,000 population. That's less than one percent, meaning that if you were alive on January 1, 2020, chances are very good you still are. With life expectancy in the US in 2020 at 78.93 years, a 0.08% increase from 2019, chances are you'll survive 2021 as well. People under the age of 60 have extraordinarily good odds and they increase the younger you are.

Huzzah!

Unemployment, as measured by the Labor Department, is currently 6.7%, which is probably not very accurate, but, for those enamored of cheery government numbers, it means that more than 93% of the people in the labor force are working and taking home a paycheck.

Yippie!

The price of oil held pretty steady at about $40/barrel of WTI crude, keeping gas prices in much of the United States under $2.00 per gallon, which is great news for anybody who has to drive anywhere, for any reason.

Hoorah!

Inflation has been low for years and was up just slightly in 2020. There are still bargains galore in all manner of consumer products if one knows where to look.

As far as investments are concerned, just about everything is up for 2020.

Here are numbers for the major indices, gold, silver, and bitcoin, and how much a $10,000 investment in each, made on December 31, 2019, would be worth today.

Item: 12/31/19 / 12/13/19 / % +/- / Per $10k

Dow: 28,538.44 / 30,046.37 / +5.28% / $10,528
NASDAQ: 8,972.60 / 12,377.87 / +37.95% / $13,795
S&P 500: 3,230.78 / 3,663.46 / +13.39% / $11,339
NYSE: 13,913.03 / 14,355.29 / +1.03% / $10,103
Gold (oz): 1,574.30 / 1,843.60 / +17.11 / $11,711
Silver (oz): 18.13 / 24.09 / +32.87 / $13,287
Bitcoin (US$): 7,165.62 / 19,335.94 / +269.84 / $36,984

Not a bad showing for some of the major assets, but the trend is clearly towards alternatives, with Bitcoin, silver, and gold holding the #1, #3, and #4 spots out of seven. NASDAQ's 37.95% gain is also a nod toward the future, as that index is loaded with speculative tech issues.

For the week, stocks were uniformly lower, with each of the major indices registering a loss. For the NYSE Composite, the decline broke a streak of five straight weeks on the plus side. The other major averages were up four of the prior five weeks before this week's minor washout.

Treasury yields were lower at the long end, with the 10-year note shedding seven basis points, from 0.97 to 0.90%, and the 30-year bond slipping 10 basis points from 1.73 to 1.63%.

Crude oil remained at an elevated level, with WTI crude advancing slightly, from $46.26 a barrel to $46.56 at Friday's close.

Precious metals were volatile but ended mostly flat, with gold ending the week of December 4 at $1840.00, and this Friday at $1843.60. In between, it hit a high of $1874.90. Silver closed at $24.25 on 12/4, advanced as high as $24.79, closing at $24.09.

Here are the most recent prices for commonly sold gold and silver items on eBay (numismatics excluded, shipping - often free - included):

Item: Low / High / Average / Median
1 oz silver coin: 28.00 / 39.00 / 33.07 / 32.53
1 oz silver bar: 29.95 / 37.50 / 33.94 / 33.65
1 oz gold coin: 1,928.95 / 2,011.14 / 1,972.40 / 1,982.94
1 oz gold bar: 1,935.18 / 1,959.94 / 1,947.09 / 1,946.52

Happy Holidays!

At the Close, Friday, December 11, 2020:
Dow: 30,046.37, +47.11 (+0.16%)
NASDAQ: 12,377.87, -27.94 (-0.23%)
S&P 500: 3,663.46, -4.64 (-0.13%)
NYSE: 14,355.29, -39.05 (-0.27%)

For the Week:
Dow: -171.89 (-0.57%)
NASDAQ: -86.36 (-0.69%)
S&P 500: -4.64 (-0.13%)
NYSE: -62.04 (-0.43%)


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