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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.
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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Friday, April 1, 2022, 9:03 am ET
That was quite the last hour of trading on Thursday in the US, as bears took over after Joe Biden announced his plan to waste another 180 million barrels from America's Strategic Petroleum Reserve.
America's Strategic Petroleum Reserve is a collection of underground salt caverns in Texas and Louisiana that can hold more than 700 million barrels of oil, although it is not currently full. The reserve held about 568 million barrels last week, down from more than 650 million barrels in mid-2021, according to the U.S. Energy Department.
Biden's plan is to release one million barrels a day for the next six months. He's already tapped it twice, releasing 50 million barrels in November and another 30 million in March. Neither were able to staunch the upwards direction of the price of fuel at the pump or into homes as heating oil.
An additional infusion of a million barrels a day is unlikely to cause prices to fall. America consumes nearly 20 million barrels a day, the worldwide use is close to 97 mb/d, and the US now exports more than it imports. There's the policy decision that should be changed, but, as usual, government doesn't see it.
Getting back to Thursday's final hour collapse in stocks, it appeared to be well-organized. The four main indices (see below) all fell by 1.54 to 1.57%, almost as if it was planned all along. Noticing the little things, like the daily odd movements in markets or stocks, is what makes for interesting, if not confounding, market analysis.
There is plenty of big money working together to keep stocks in a range between a crash and record highs. This became very obvious the past two weeks of March... until the past two days, shaving off about two percent overall. Prior to that, the Dow ramped roughly 2,662 points from the 8th of March to the 29th. The NASDAQ was even more explosive, gaining 2038 points from the 14th through the 29th. Both came off lows not seen in more than a year. Similar activity marked the S&P and NYSE, but stocks are still underwater for the year, the first quarter now an ugly stain Wall Street would like to erase, though it can't.
More to do about the underlying economy than the war in Ukraine, stocks have been under pressure for the longest period since the GFC of 2008-09. The drawdown on the NASDAQ began in November, as it did for the other indices, though the Dow, S&P, and NYSE managed to break to new highs in January, though not significantly higher than the records set in November.
Essentially, stocks have been selling off in fits and starts since mid-November of 2021, looking ahead to a full five months of a downtrend in a few weeks time. If there's any indication of where the market is headed, one need only reference the recent past.
Elsewhere, treasuries are a shambles, with the 10-year note dropping to a yield of 2.32%, which, in itself, isn't too bad, considering it was 2.48% a few days ago. What's troubling is the inverted curve, as 3s, 5s, and 7s are all sporting yields higher than the 10s, at 2.45, 2.42, and 2.40%, respectively. The 2-year is now just four basis points lower than the 10-year, at 2.28%, soon to invert as inflation pokes shorter maturities higher. It's now more expensive to lend the US government for three years (2.45%) than 30 (2.42%), but not 20, which is blown out at 2.59%.
Gold, silver, and bitcoin, the real money in the world today, have been slammed lower overnight. US currency riggers at the Fed and the Exchange Stabilization Fund are working overtime to keep the US dollar relevant, though that's going to be increasingly difficult now that Russian President, Vladimir Putin, has demanded payment from "unfriendly countries" for gas in roubles. The unfriendliest are the US, UK, and Europe, which relies on Russia for about 30% of its energy needs. The amounts and percentages vary by country, with Germany tops on the list of the needy and unfriendly.
Also, the Russian central bank has begun buying gold at a set price of 5000 roubles per gram. With the rouble worth about 0.012 (1.2 cents) to the US dollar, that sets the Russian gold price right around 1900 per ounce. If the rouble strengthens - which it should - gold will gain as well. Russia will continue buying gold at their fixed price through June 30 and then re-evaluate.
With an hour to go before the opening bell in New York, the BLS announced that total nonfarm payroll employment rose by 431,000 in March, and the unemployment rate declined to 3.6 percent, figures pretty much in line with expectations, though a slight miss from the consensus of 490,000.
What used to be a major market-mover, non-farm payroll releases are now just another number randomly thrown to the wolves and pundits to devour and regurgitate. US labor markets are so far removed from reality as to be something of a comedy show. 3.6% unemployment is better than the 4% that used to be considered full employment. What the number fails to include or point up are the millions of people that have dropped off the unemployment roles, the 59 million people on some kind of welfare, nor the 47 million retirees, all of them receiving some form of government pension.
With 106 million getting paid by the federal government and only about 157 million workers contributing, there's a real drain on financial resources and one of the main reasons government budgets are so bloated and the US debt approaches $31 trillion. Not to worry, it's only a $242,500 yoke around the neck of every taxpayer.
With the final trading session on tap, stocks are nearly unchanged for the week, with the Dow and NYSE Composite lowest, the S&P off 12 points and the NASDAQ ahead by 51 points through Thursday's close. Futures are pointing higher. European stocks have gains of less than one percent.
It's April 1st, so don't believe everything you see or hear.
At the Close, Thursday, March 31, 2022:
Thursday, March 31, 2022, 9:50 am ET
Barring any unforseen, sudden, massive rally today, the first quarter of 2022 will be one that investors would rather forget, even though the past three weeks have been nothing short of spectacular.
With one trading day remaining in the current quarter, the Dow Jones Industrial Average is down 3.71% since the start of the year. The S&P 500 is off by 4.05%, and the NASDAQ fell 8.78%. The lows for the quarter had the Dow and S&P down a smidge more than 10% and the NASDAQ down 20%. Whatever market forces were working to ramp the three major indices higher since March 14 are unbeknown to mere mortals.
Bond yields ripped higher, the price of oil and gas went through the roof, and general inflation was widespread and running wild in the US economy. Normally, those conditions would send stocks deeper into decline, but, since stocks are largely bought and sold by the same conflicted parties via stock buybacks, the NY Fed's trading desk, the PPT, Vangaurd, or Blackrock, up they went, giving no heed to the geo-political events that brought the planet close to a third World War.
Bulls will counter that the economy is still buzzing right along, there's nearly full employment, and, somehow, higher prices for everything from Fruit Loops to fertilizer is a positive.
Never mind that employers continue to have trouble filling open positions, or that farmers will be squeezed by higher input costs and may plant fewer crops than normal. The US economy is just humming right along.
It's all rubbish; a real bull story.
The US economy hasn't grown in any meaningful way since around 2000. GDP growth, on a year-over-year basis, declined in 12 of the 21 years through 2020. The US economy and GDP isn't growing. It's inflating. GDP gains failed to keep up with the rate of inflation nearly every year since 1999 and currently is lagging far behind as inflation is running at +7.9% and GDP, as of the last quarter (4Q, 2021) was revised to +6.9% a day ago.
While the numbers appear positive, they're actually not. If, on average, everything cost 7.9% more, then GDP at 6.9% is simply a poor measurement of inflation. Besides, since the numbers come from the government, they're probably far from true. Inflation is likely understated and GDP "growth" massively overstated. In real terms, using the government's own numbers, the economy is falling behind the inflated costs of everything by one percent. Keep doing that year after year, and soon enough you'll end up with a massive GDP made possible by the purchasing power of the dollar sinking into the economic abyss.
In 2001, GDP was just under $11 trillion. In 2021, it was nearly $23 trillion. Did the economy double in size over those 20 years? Absolutely not. The economy certainly inflated by that much, though. Everything costs at least double what it did just 20 years ago. That's not a sustainable condition, especially since wages haven't shot up at the same rate. Median household income in 2000 was just under $60,000. In 2020, it was $67,500. Though a nice gain, wages have not doubled. A doubling of wages would have median household at $120,000. America becomes less wealthy and more poor with every passing day, week, month, year.
That pound of grapes you bought in 2000 is now half a pound. The SUV you bought in 2000 is now a two-door economy sedan. That's been the trend for at least 20 years and it's about to get worse. It's not going to reverse.
Guess what? Honest money, like gold, silver, and bitcoin, fixes that.
At the Close, Wednesday, March 30, 2022:
Wednesday, March 30, 2022, 9:27 am ET
Editor's Note: Apologies for the brevity of today's note. Tuesday was a maddening experience at dtmagazine.com. Hosting service broke the web store and couldn't fix it. Spent almost all day Tuesday and most of Wednesday morning getting assistance. It's now functioning, but our host failed to fix the core issue, but it will work for a fw months, until upgrading. Regardless, not much time for today's message. Sorry, --FR
Stocks were guided higher by TPTB, apparently encouraged by peace talks in Ukraine, not that it matters much in the larger scheme. The Western economies are crumbling under mountains of debt, built up over many decades, but especially since 1990. Woes of the West can be traced back to 1913 and the birth of the Federal Reserve System, wherein the US congress usurped their role of monetary authority and handed it over to private bankers. 115 years later, the American public is at their mercy.
It's ludicrous to witness stocks at such elevated levels when the US economy - and that of Europe - is deteriorating and the currency is about as valuable as - quoting a Russian economist - "candy wrappers," but this is what fate has handed us.
With minutes before the opening bell in NY, bitcoin is stable at new levels above $47,000, gold and silver are recovering from their most recent whipping by the COMEX, and stocks are setting up for a lower open. Prominence of the LMBA and COMEX futures in gold and silver is about to be shattered. Already, dealer inventory on gold and silver is facing shortages, but the COMEX sees fit to price gold lower. This will not last.
Continued buying of assets outside the US dollar and euro systems will eventually reap huge benefits. Russia is attempting to turn the global economy on its head. When China steps forward into the fray, the clock will be run down on Western economies. Being prepared for changes this large isn't easy, but gold, silver, bitcoin are routes out of the matrix.
At the Close, Tuesday, March 29, 2022:
Tuesday, March 29, 2022, 9:00 am ET
The Western world has everything backwards.
We have a president who was installed by deep state operatives who stole the 2020 election. Not to put too fine a point on this, but there's no doubt that Joe Biden didn't win the presidential popularity contest in any but a couple of states, if any. The 2020 election was the most corrupted since the founding of the United States of America. The rigging was confined not to just the presidential election, but to many Senate and House elections as well. The two Senate elections in Georgia - which gave the Democrats the 50-50 majority thanks to the tie-breaking skills of Kamala Harris, the fake Vice President - were a complete farce. Most of the House races in California were rigged for Democrats as well.
While there's substantive proof that the elections were stolen, the mainstream media continues to insist that everything was on the up-and-up, calling President Trump's assertions "false." The exact opposite is the truth. Again, the US media machine has everything upside down.
In what may be the most prescient piece of opinioning in many years, Tom Luongo lays out the case for Russia's wrecking of the gold and silver supression that's kept the Eurodollar system in place for decades, since before Nixon took the United States - and the world - off the gold standard in 1971.
That's why we're linking #GotGoldorRubles? Russia Just Broke the Back of the West three times.
Anybody who is concerned about their future or those of their kids, should take the time to read it thoroughly, as it lays out the framework by which Russia (and eventually China) will change the state of play in world economic markets while also cautioning that the response by the West may be disastrous for the world because they are caught in a losing situation.
In a nutshell, Russia's two major announcements - that they would sell oil for roubles only to 'unfriendly countries' and THE RUSSIAN CENTRAL BANK WILL RESTART BUYING GOLD FROM BANKS AND WILL PAY A FIXED PRICE OF 5,000 ROUBLES PER GRAM BETWEEN MARCH 28 AND JUNE 30 - have put the world on notice that Russia is calling the shots from here on out. Not the US State Department, not the COMEX, not the LBMA, not the ECB or the Fed, or the European Commission. No, Russia, and, short of nuking TF out of Russia, there's little Western nations can do about it.
If Germany, France, Italy or any of the other EY nations, or the US, Canada, UK, Australia, doesn't want to pay for Russian oil in roubles, they'll get none. Putin and Russia is not going to back down form this, regardless of what happens in Ukraine, or Syria, or anywhere else, for that matter.
Western nations prodded, pushed, and goaded Russia to take on Ukraine, applied sanctions, and stole Russia's reserves. This is what they're getting in return because nobody can sanction Russia's oil and gold that's in the ground or - in the case of gold - in their vaults, and they have vast amounts of both. Because of that, Russia will eventually rise to the status it deserves: of the world's greatest power.
Americans, as hypnotized as they are by the mainstream media, have been conditioned to root for the wrong team in all of this, as though Ukraine was victimized by the evil Putin and his Russian army, navy, and air force. That may be the case, in reality, but the underlying truth of the matter is the US, UK, and EU wanted this war, planned this war, and pushed Russia to the brink of extinction, forcing Putin's hand.
For their efforts, the Western nations will get inflation, weaker currencies, and oil priced in roubles, not dollars. Essentially, US dollar hegemony is over and anybody who can't see this will suffer the consequences. Did anybody not notice the huge run-up in the price of Bitcoin? In the past week, it has priced up from $42,000 to over $48,000. While there's likely to be some pullback, it won't be long-lived. Bitcoin's rise is de-dollarization in action.
For their part, the COMEX and LBMA responded as they usually do, smashing down the prices of gold and silver. When the COMEX market closed for the weekend on Friday, March 25, gold was $1,957.60 an ounce, silver, $25.73. as of this writing, gold is $1,891.00, and silver, $24.00... and falling. The globalists are one-trick ponies. All they know how to do is suppress the prices of the things that would reveal the true value of the dollar, the euro, yen, yuan, and all other fiat currencies, which are nothing more than paper promises made by corrupt governments and central bankers.
For those who wish to see the true value of the dollar, euro, or other fiats, just go to a grocery store. You'll get less of just about any food - meat, vegetables, fruits, processed foods - than you did last week, and the week before, and the month before, year before, decade after decade before. Fiat currencies - as Money Daily has been preaching for years - are on the way to extinction, and Russia has just accelerated the process.
It would be not only prudent, but wise, to buy as much gold, silver, bitcoin, and any other commodity outside the dollar/euro/yen/pound system, because, as fiat falls, hard money will rise.
At the Close, Monday, March 28, 2022:
Sunday, March 27, 2022, 8:53 am ET
Stocks finished higher for the second consecutive week, led by the NASDAQ (+1.98%) and the S&P 500 (+1.79%).
Major indices are all still down for the year, however. Year-to-Date:
Higher rates for treasuries call into question the risk preference of owning stocks.
Yield Curve Rates:
The biggest mover on the week was the one-year note, with yield up 38 basis points. Notably, the spread between 2s and 10s is now only 18 basis points and the belly of the curve is inverted, with yields on 3s, 5s, and 7s higher than the 10-year (2.48%, +34 bp on the week). Highest is the 20-year bond, now 14 basis points higher than the 30-year.
As the Fed increases rates over the next six FOMC meetings, with suspicion that one or two 50 basis point hikes may be included in their battle against inflation (mostly likely May and September). The Fed will raise rates at each meeting for the remainder of the year and possibly into 2023. The FOMC meets eight times each year, skipping February, April, August, and October. Not ruled out is an interim emergency hike between meetings, though that would signal a Fed that is completely unhinged.
Barrel of WTI Crude, 3/11 $109.33
Gasoline (at the pump, via GasBuddy.com):
US National Average as of 3/27: $4.251
Gold price 03/13: $1,992.30
Silver price 03/13: $26.22
Here are the latest prices for common one ounce gold and silver items sold on eBay (numismatics excluded, shipping - often free - included):
The Single Ounce Silver Market Price Benchmark (SOSMPB) fell over the course of the week, to $41.11, a drawdown of $1.31 from the March 20 price of $42.42. The price remained above $40.00 for the third consecutive week.
That's a Wrap.
At the Close, Friday, March 25, 2022:
For the Week:
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