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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, March 11, 2022, 9:00 am ET
Sanctions have consequences.
Russia knows this. The US knows this. Europe, China, and the rest of the world knows this.
What's less clear is how the sanctions affect the ones making the sanctions, such as the EU, UK, and US are finding out after throwing a blanket over the Russian economy with a series of trade and financial sanctions designed to shut the country off from world markets.
Retaliation from Russia has been swift, outlawing - to a degree - foreign currencies, and releasing a list of exports which will be denied to the Western nations, including grains, ores, and some manufactured items.
Blowback from the sanctions was expected and it arrived in the form of much higher oil and gas prices in the US and Canada, but especially in Europe, where some countries get 30-40% of their energy supplies from Russia, mainly natural gas and crude oil.
Thus, with Russia on the verge of capturing the capitol, Kyiv, both sides of the war are hurting, though none more than Ukraine, which will be wrecked for years when the active phase of this war is over, likely within days or weeks. In the meantime, citizens suffer as politicians and bankers capitalize.
Above all else, governments and central banks have become expert skimmers of other people's money. The recent seizures of Russian oligarch money and property - yachts, jets, villas, bank accounts, investments - comprises the most public of the operation by Western nations and their central bank cohorts.
It's not by accident that central bankers at the Federal Reserve, Bank of England, and at the ECB have not said a word about the Russia-Ukraine conflict. Their silence is deafening, as they stand back and collect the grift. Congress has been more vocal about their part, supporting Ukraine while making Russia the bad actor at every opportunity.
The Senate passed a massive $1.5 trillion spending bill Thursday, preventing a government shutdown while providing $13.6 billion in emergency aid for Ukraine. everybody should be aware of where much of that money is going. It will be lining the pockets of the Senators who passed the bill, 68-31, after it received House approval Wednesday. Fake president Joe Biden is expected to sign the measure into law before government funding runs out Friday night.
The bipartisan spending measure would fund the federal government through Sept. 30, with increases for both defense and nondefense programs over 2021 levels.
Great timing, isn't it? With limited debate, pass a huge spending bill with overwhelming support from both parties, just as the government was about to run out of money. There's no coincidence here. This was all planned months ago. The DC grifters will carve up the pork and aid monies with their usual dispatch. War profiteers every one of them, they're unlikely to get caught with their fingers in the bag, though, even if they do, there will be no negative repercussions. That's just how the US government rolls.
This particular grift benefits all the politicians and their usual cronies, the oil companies, which were already boosting prices before the war began, but really upped the ante over the past week. Oil execs get rich, politicians get rich, Fed presidents get rich. Average Americans take one for the team. Go, Ukraine! Fight! Lose!
Governments and central banks are like the hosts of poker parties or high-end casinos. Private poker parties are generally held at the home of a non-participant, who puts out a nice spread of sandwiches, snacks, and drinks in return for 5-10% of every pot. Even in a nickel-dime five-card Texas Hold 'Em game, the host will likely pull in more than his/her outlay, plus a little left over for being gracious. The House always wins. Every time. Why do you think drinks are free at most respectable casinos?
Government skims via taxes and fees, so, when the price of oil and gas went up, so too their tax revenue. The suckers driving around expensive SUVs, gas-guzzling trucks, vans, and crossovers don't get a break. The states and the feds get a nice windfall. The Fed makes more money on interest. Big club. You're not in it.
The levels of greed, corruption, skimming, and scamming goes even deeper. Just like the virus scam wasn't about health, but, rather, about population control and conditioning, so too, the Ukraine war isn't about land or democracy so much as its about greed, corruption, lies, and the US dollar, the world reserve currency.
Russia is merely a convenient scapegoat, though Vladimir Putin will get his buffer zone in the area which used to be known as Ukraine. As of Friday, Russian troops have Kyiv nearly surrounded and are preparing to lay siege to it, capture it, and impose some version of Russian martial law in order to end the open conflict. Russia likely faces years of insurgency, but that was expected. Putin does not want to own Ukraine; he only wants control of it and he's likely to get it.
A peace deal will be announced soon, probably within days.
As for current events, just before 7:00 am ET, InterFax reported that Russian President Putin commented that "there are certain positive developments in the negotiations on Ukraine."
No other news outlet picked up the story, even though it was bona fide fake news. European stocks, US equity futures and Bitcoin spiked higher. Gold and silver were sent lower. There are no coincidences, only predetermined market movements which appear chaotic but in reality are not. The allied West will fool most of their own people, but they've shown their hands. Brazenly seizing assets, shutting off Russia, a nation with the world's largest land mass and a major producer of everything from oil to rare metals, sends a message to the leaders of other countries, some of which may see themselves as potential victims of US dollar hegemony and heavy-handed financial warfare.
Those countries - and even some of the European nations - will seek refuge outside of the dollar debt fiat system. Russia and China already have alternatives to the dollar-denominated SWIFT system and have been making cross-border trades in native currencies or barter for years. Countries in the Middle East, along with India, Brazil and some Latin American countries, most of Africa are using alternatives to the US dollar and the recent actions by the US and its financial allies has only accelerated the de-dollarization of the rest of the world.
In the end, all of the fiat currencies will die, with the US dollar probably the last, but, prior to that, the world's finances will break apart into East and West blocs, and maybe splinter off in uncharted directions.
Currently, the inside money is dollars, euros, treasuries, corporate debt, and assets held in Western curencies and Japanese yen. Outside money consists of China's yuan, Russian rubles, gold, silver, commodities and cryptocurrencies, with heavy focus on bitcoin.
Keep in mind the advice of poker parlance, "if you're in a rigged game and don't know who the mark is, it's you."
Through Thursday, here's how the main equity markets stacked up: Dow, -440.73; NASDAQ, -183.48; S&P 500, -69.35; NYSE Composite, -200.10. Futures are pointing to a gap up at the open, so there's a very good chance that stocks will erase their losses - as is happening in Europe - and end the week on the plus side.
You got to know when to hold 'em
-- The Gambler, Songwriter: Don Schlitz; made famous by Kenny Rogers
At the Close, Thursday, March 10, 2022:
Thursday, March 10, 2022, 9:20 am ET
With progress toward a cease fire or surrender by Ukraine stalled, the fighting in Ukraine continues, though it appears the Russians are in no hurry to accomplish their objectives of de-militarization and de-Nazification of the country. Russia, unlike the United States, NATO, and the EU, can be taken at their word on what constitutes the rationale behind their military maneuvers. The process of generally disarming Ukraine is going to take months, if not years, of concerted effort by the Russian military, given the opposition continues to call for increasing the flow of arms and weapons into the country.
Western nations are prolonging the conflict, and are not aiding progress by deliberately seizing Russian assets and attempting to remove Russia from the international financial system. So far, with sanctions in place, all they've managed to do is put Russia in a position of alienation and self-survival, as Russia has responded to Western sanctions with remedies of their own, such as cutting off grain exports and generally announcing a cessation of commerce with the West.
While the US and its allies may believe they are winning the financial war (the Russian stock exchange - MOEX - has been closed for nearly two weeks, since February 25), the blowback has become a serious issue which is more than likely to escalate in weeks and months ahead. Basically, the West has cut off Russia and with it, about 10% of world trade. The future effects will redound negatively to US, UK, and European corporations which temporarily shuttered operations in Russia, notably, McDonalds, Starbucks, Coca-Cola, Visa, Mastercard, and many more, including major energy producers such as ExxonMobile and BP. The list of US companies refusing to do business with Russia is extensive.
First quarter earnings results for many companies will be affected, but, should these conditions continue into April, May, June and beyond, expect many companies to show lack of growth or second quarter results that will fall far short of expectations. It's just not possible to stop doing business with 145 million people and not experience top, and bottom line pain.
Beyond the hit to corporates, US, UK, and European consumers are being hard hit by high energy and food prices. To that point, US February CPI came in as expected, showing a rise of +7.9% year-over-year, the highest since January 1982. Consumer prices have now been rising for 21 consecutive months with no end in sight and nary a plan or mention for amelioration from government sources.
For all intents and purposes, the US government has left the American people out to dry, with no solutions and none proposed other than to denigrate white people, encourage transgenderism, seize Russian assets, and have their puppy-dog media lie about everything else. At least the government has stopped all the virus nonsense, now that Russia poses an existential threat to the hegemony of the US dollar. Funny how that worked out.
Americans, European and subjects of the UK Commonwealth will bear the brunt of sanctions, not Russia. Everything will cost more, eventually pushing the country into a recession, or worse.
Biden's (not the real president) Executive Order concerning cryptocurrencies, the Executive Order on Ensuring Responsible Development of Digital Assets greatly misses the point. Instead of calling cryptocurrencies just that, the order refers - in rather nebulous, superfluous terms - to Bitcoin, Ethereum, Dogecoin, etc. (never once naming any specifically) as digital assets, rather than money or currency, which is the obvious case for Bitcoin, at the very least.
Instead, the order is a set of instructions for various federal agencies to coordinate and share information about cryptos, and, within anywhere from 120 to one year, develop reports on how to deal with the growing adoption of crypto. Witness to the confused and wasteful approach is made in the following list of agencies tasked with developing and coordinating reports and recommendations.
Sec. 3. Coordination. The Assistant to the President for National Security Affairs (APNSA) and the Assistant to the President for Economic Policy (APEP) shall coordinate, through the interagency process described in National Security Memorandum 2 of February 4, 2021 (Renewing the National Security Council System), the executive branch actions necessary to implement this order. The interagency process shall include, as appropriate: the Secretary of State, the Secretary of the Treasury, the Secretary of Defense, the Attorney General, the Secretary of Commerce, the Secretary of Labor, the Secretary of Energy, the Secretary of Homeland Security, the Administrator of the Environmental Protection Agency, the Director of the Office of Management and Budget, the Director of National Intelligence, the Director of the Domestic Policy Council, the Chair of the Council of Economic Advisers, the Director of the Office of Science and Technology Policy, the Administrator of the Office of Information and Regulatory Affairs, the Director of the National Science Foundation, and the Administrator of the United States Agency for International Development. Representatives of other executive departments and agencies (agencies) and other senior officials may be invited to attend interagency meetings as appropriate, including, with due respect for their regulatory independence, representatives of the Board of Governors of the Federal Reserve System, the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and other Federal regulatory agencies.
Taken together, there are 25 agencies which are "ordered" to investigate crypto and the possibilities of Central Bank Digital Coins (CBDC, none of which are actually in existence) and coordinate their activities into some coherent framework. As the illegitimate Biden administration has shown repeatedly over its first 14 months at the helm, coordination among various bloated, unnecessary, and largely ineffective agencies is a signature pipe dream.
Chances of the United States developing a functional regulatory framework regarding crypto in general over the next six months to a year are essentially zero. Imagine a bunch of people who couldn't program a VCR - technology from a generation ago - tackling the issue of global regulation of blockchain technology, something most of the people at these agencies have only cursory knowledge.
Investors in Bitcoin should be especially encouraged by this executive order fluff piece. The US government is no closer to regulating cryptocurrencies than they were six or eight years ago. The exclusion of the Internal Revenue Service (IRS) from the agencies tasked with developing a framework speaks volumes about the government's ability to make headway in the crypto space. As the leading taxing enforcement authority, the IRS being left out of the loop demonstrates that the federal government is hamstrung when it comes to crypto regulation.
They simply cannot halt the progress of crypto, especially Bitcoin, and they are so afraid of what it does to their domination of financial markets that they've called "all hands on deck" to deal with the desperate situation in which they find themselves. As usual, governments are years behind technological innovation. Considering the internet as an vitally important technology, the level of regulation by the US government in particular, has been slow to develop and even more difficult to enforce.
The same can be said for Bitcoin and the crypto-universe. By the time governments come up with any kind of rules or regulations, the community of developers and adopters will have moved to another paradigm. Governments will be unable to keep up, eventually resorting to strong-arm and scare tactics because they are, essentially stupid, slow, limited, devoid of imagination, bankrupt, bureaucratically inefficient to a point approaching obsolescence, and, ultimately, impotent.
With all that going for them, crypto should manage to continue growth and adoption worldwide, eventually displacing - or at least diminishing - the legacy fiat currency systems.
With the national average for a gallon of unleaded regular now exceeding $4.35, isn't it time the American people do something about the destructive policies emanating from the capitol in the District of Columbia? Surely, we can do better. In the meantime, gold, silver, bitcoin and some canned goods still look pretty cheap.
Minutes prior to US equity markets opening, futures predict a swan dive off the high board, European stocks are in the tank, though Asian markets were sportingly higher.
At the Close, Wednesday, March 9, 2022:
Wednesday, March 9, 2022, 8:33 am ET
Astute viewers of the media cycle will notice that since it's Wednesday, stocks must go up. No other logic is implied or allowed. Stocks have been going down for a while, so they must be oversold, meaning, it's rally time in the Western world.
Make no doubt about it, there are already hordes of war profiteers at the Ukraine trough. Not to name names (ExxonMobile, Lockheed-Martin), oil companies and defense contractors are the fattest pigs of the bunch. Their stocks have rallied sharply as the price of oil, gas, food, and other commodities have risen rapidly during the "crisis."
It's all US and European nations have anymore to buoy up their ailing economies. Crisis puts money in the pockets of politicians and their major campaign contributors, Wall Street banks, hedge funds, and other hidden monied interests. Getting screwed as usual is the consumer, who is forced to pay higher prices for everything or stay home and starve to death. It's not much of a choice.
And then there are the usual dunces like Rick Newman of Yahoo! Finance, who try to tell us, Gas prices aren't really at a record high. Newman always couches his theories in the camouflage of "inflation adjusted," a term, when employed, always and every time means the speaker is either a moron or is lying, or both.
Newman would have us believe that the current $4.19 AAA national average price of a gallon of unleaded regular is actually less than the 2008 level of $4.16. His inflation adjusted target price is now $5.25 per gallon, which, just in case anybody had any doubts, will probably be the reality in a few months. Then Mr. Newman can STFU. Or have the so-richly-deserved lobotomy people have been urging him to get.
Being a senior columnist for Yahoo! Finance, regarded in financial circles as "Playskool for Journalists" speaks volumes about Newman's analytical skills, which are comparable to those of a dead camel or a handful of coffee grounds. Newman has never tried to hide his insipid leftist leanings. For the four years of Trump's presidential tour, Newman never offered the Donald a kind word. Now, Biden and Pelosi are his heroes as he breathlessly details America's demise as something spectacular and wonderful. He's probably a big fan of Josef Stalin, despite the dead leader's innate Russian-ness.
Newman's column (linked above) generated sizable outcry from the Yahoo nut squad commentators, nearly 700 strong. Among the best was this:
The truth violates Yahoo's community guidelines.
Trying to ease the pain at the pump by telling people it's not so bad isn't an endearing approach. Rick Newman is a certifiable loon, though there is some question as to whether his incapacitated frontal lobes are the result of genetics or a near-constant bumping of his forehead against reality's brick wall since he became a published author.
In any case, Newman's writing seems to be leading the charge for a rebound in stocks, higher gas prices, $24.95 a pound prime rib, and maybe even a run on toilet paper, again.
Along with European stocks and US equity futures, Bitcoin has managed to rebound eight percent overnight, peaking above $42,000, which is soon to be recognized as the official BCPP (Block Chain Pivot Point).
At the Close, Tuesday, March 8, 2022:
Tuesday, March 8, 2022, 7:30 am ET
Would you pay more for gas to help Ukraine fight Russia?
That has to be among the most flagrantly provocative and foolish questions of all time, though it didn't stop presenters on MSM news shows from asking it.
The answer is contained within the question itself. Anybody in favor of continued aggression in the Ukraine-Russia conflict is already paying more at the pump. Even people opposed to Ukraine are paying. People opposed to war, in favor of war, indifferent to war are paying. We're all paying more and it all could have been easily avoided if the US, UK, and EU had stood down and accepted Russia's demands a month ago.
Russia wanted nothing more than a halt to the NATO advance which has been encroaching closer and closer to Russia's borders since the fall of the Berlin Wall in 1989. Russia's desire to keep opponents away from its borders and to keep Ukraine out of the NATO alliance and the European Union was not an act of aggression. It was simple self-defense. The allied forces would have none of it, rejecting Russia's proposals without compromise.
So, we get WTI crude oil at $125 a barrel and gas at $4.00 and up, while Europe gets Brent crude for a few dollars more and petrol at over two euros per liter. It should be fairly obvious that the war - fomented and urged along by the Western nations - is good for nobody. Ukrainians are being killed. Russians are being killed. The rest of the world pays more for oil, gas, and everything else, while stock prices tumble, and food prices soar.
Humanity has nobody but itself to blame. Trucker convoys, mass protests, rigged elections have done nothing to stop the globalist plans, which, apparently, are to torture, maim, or kill every person on the planet. These so-called "leaders" like Joe Biden, Emmanuel Macron, Boris Johnson, and members of their parliaments or legislatures hide behind the false flags of democracy and peace while secretly advocating the opposite. They demand fealty and war and they're being allowed to do so because most of the world has been hypnotized by media, made slavish by a virus, or was already too lazy, self-interested, stupid, and cowardly to do anything about it.
Truth is, large populations are disorganized and kept that way by governments wary of populism. These are the same governments that tax people's labor, denigrate real patriots, regulate alternative currencies, and generally enslave billions worldwide. To think that life is better, more free, less frightening in the US or Europe than it is in Russia or China is the height of folly. Western governments would sooner imprison dissenters than hear their pleas. The January 6 protesters in the United States and the freedom truckers in Canada are proof of the levels of disdain and mistrust government has for its people. The Yellow Vests have been protesting regularly in France for years. They've gotten nothing but tear gas, bashed heads, and arrests to show for it.
With opposing forces already haven taken sides in the Ukraine conflict, Americans, Britons, and Europeans are encouraged by propagandist media to side with Ukraine, as if there's any sense in that. Ukraine is losing and will lose the war with Russia, regardless of how many sanctions the West imposes, how many mercenaries are brought into the fight, how many warplanes, drones, anti-aircraft machines, and small arms are brought to bear against Russian forces.
Russia will not relent. They have been reasonably prosecuting their war in Ukraine, limiting civilian casualties as much as possible, advancing with caution, and attempting to engage the leaders of Ukraine to come to terms, but all they hear is the puppet leader, Zelensky, vowing to fight until the end, lying that he does not fear the Russians. A sane person would negotiate. A puppet does the bidding of others, particularly, in this case, the US and their oppressive military industrial complex.
Rather than taking sides, Americans and all Westerners should be praying for a quick resolution to this conflict, but the media and the politicians insist on painting Russian president, Vladimir Putin, as a ruthless dictator hell-bent on re-establishing the old borders of the USSR, a ludicrous fantasy almost as absurd as plying for a "no-fly zone" over Ukraine when the skies are dominated by Russia's air force.
In the meantime, stocks around the world took another beating on Monday. From the NIKKEI to the DAX to the American Dow Jones Industrials, NASDAQ, and S&P indices, a sea of red was the order of the day. Most everywhere in the world is in a bear market and it looks to be a protracted one, having begun in earnest at the start of the year and having run ceaselessly since. The Ukraine-Russia conflict only exacerbated an already unstable, untenable global equity market and US and European interests seem intent on expanding that.
Should the Ukraine conflict expand beyond its borders, $4 gas and $6 ground beef will look like bargains as conditions worsen by orders of magnitude. World War III is not exactly what people are looking forward to, other than the globalists who haven't gotten their way, yet. These are the same people who brought the world two years of medical lies, death, and misery. Now they want to amp up the pain to an even greater degree.
Current Western ministers and their media lackeys are the worst sociopaths the world has ever seen. They must be removed from power, by election or otherwise, and we already know how ineffective elections have been. Recent elections gave us these monsters. Voting again is unlikely to produce a positive effect for the general public as these monsters are deeply entrenched in their lust for power.
For now, civil disobedience appears the most compelling route for individuals. Multiplied by the thousands, maybe millions, withdrawal of consent, refusal to comply, and general disdain for the polity might assuage the condition to some degree, but it is an incomplete solution. Complete regime and policy change is not only necessary, but demanded. The world cannot be subjected to the whims and wild imaginations of a small group of people who believe they are somehow better, more enlightened, than the rest of us.
Occupying Ottawa produced nothing in terms of results. The Canadian government proved to be every bit as ruthless and deceitful as the worst communist or fascist regimes. Driving in circles on the DC Beltway is a bone-headed, cowardly attempt to make a point. It will achieve nothing. The truckers might as well go home and get back to business.
Individual acts are self-empowering. Repetition and practice enhances the human spirit. The collective, the billions of people who want to live free from dominion and persecution, must now act individually, with purpose. Failing that, the resulting chaos will benefit only those who seek to enslave all of humankind.
The world has entered into a new dynamic of people versus governments. That is where the real war resides. Most are blissfully unaware of the dangers on the present horizon. Many have already not heard the call nor heeded it. Those who act to free themselves first from the chains of tyranny, autocracy, or totalitarianism, may avoid much of the coming conflicts, of which there will be many. The rest will slowly suffer and die.
There are important choices to be made and the time to make them is now.
At the Close, Monday, March 7, 2022:
Sunday, March 6, 2022, 9:18 am ET
Nine weeks into the current year, and so far, here's the week-to-week scorecard:
All four major indices are trending well below their 200-day moving averages. The NASDAQ made the dreaded death cross a reality last week, as the 50 day MA dove below the 200-day. The Dow and S&P are close to similar events. The NYSE composite, broadest of all four, has held up the best, down just 7.05% from its recent all-time high from January 12 (17,353.76).
Miraculously, US stocks ended the week with relatively minor losses Friday, a day that saw the German DAX lose 603.86 (-4.41%), France's CAC-40 down -316.71 (-4.97%), the FTSE in London off -251.71 (-3.48%), and Euronext 100 Index retreat -57.02 (-4.69%). America's exceptionalism apparently is measured by its distance from Moscow.
The week past marked the second week of hostilities in Ukraine, so it may not be a surprise that Europe is nearing a capitulating posture. After all, Germany, France, Italy, Spain and the rest of the EU and England don't want to poke the Russian bear very much or very often, given Mother Russia supplies much of Europe's energy needs. Europe's somewhat unified response to the Russian invasion which they largely caused has been somewhat shallow, not well thought-out, wimpish, and possibly disastrous for the European Union, the ECB, and the euro as a currency. In the very least, by unceremoniously kicking Russia off the SWIFT system, shuttering and seizing (stealing) deposits and accounts, and generally attempting to re-render the world's financial map by excluding the country with by far the world's largest land mass (11%), Europe, the Commonwealth, and the US have virtually ensured a bi- or tri-polar financial standard.
When all the chips are played and Russia has secured Ukraine away from Europe and NATO, there will emerge the Euro-Commonwealth-US standard, and the Sino-Soviet-BRICS standard, which will include Brazil, Russia, India, China, and Singapore much of the Middle East, Latin America, Africa, Indonesia and many smaller, previously-deprived nations. There is little doubt that the Euro-centric base of economies that have held financial sway over the last 250 years is waning, fading under the weight of omnipresent, unpayable debt, deprarvity, and political corruption, and that the emerging economies will begin to thrive, having seen first hand the fate that awaits them if they cross the current power structure of international finance.
Somewhere in between these two forces of economics lay gold, silver, and cryptocurrencies, primarily, bitcoin. A future in which a competing currencies include a fiat standard, a metals-backed standard, and a crypto standard is easily imagined, offering a choice to nations and even to individuals. At present, the fiat standard - which is by far the worst solution - is dominant, but the natives are restless and economic freedom on a level playing field is their aim.
Governments and banking syndicates should not be empowered to freeze, seize, or otherwise debase the currencies of which they do not approve. The recent smash and grab tactics by the Western nations unveiled the true intentions of the fiat central banking consortium. They want to control all financial function, and if one does not comply with their rules and petty dictates, they are more than willing to shut one down, cut one off, or simply take away their financial means. It's a distressing state of affairs, and honestly, quite disturbing.
Along with many others, Money Daily has been warning about the evils of fractional-reserve fiat banking and currencies for years. The Russia-Ukraine conflict has thrown the de-dollarization and anti-unipolar mechanism into overdrive. A breakaway from the tired, worn, former Bretton Woods standards could be months or even weeks from a trickle becoming a raging torrent of economic frenzy.
As for the current condition in Ukraine and why it has unfolded in such a manner, we rely on the honest, sane reportage of seasoned journalist, Mike Whitney, who encapsulates the conflict and projects its ultimate conclusion with unerring accuracy.
Russia will win. Ukraine, and with it, the West, will lose. The world will have changed radically in a very short period of time.
European markets and economies are being tor asunder and the United States does not care. To the US, Europe is an aggregation of vassal states and thus, expendable. Germany, poof. France, who cares? Italy, arrivederchi.
The following are year-to-date measures: DAX (Germany): -18.27%; CAC-40 (France): -16.01%; IBEX (Spain): -11.87%; FTSE (Britain): -6.90%. Of these, the DAX and CAC-40 are the most important and down the most severely. Not calling the currnent condition a bear market is simply a failure of semantics and basic market understanding.
The US fixed income market, primarily treasuries, is the prefect proxy for the failed policies of the United States. Investors flew to the supposed safety of treasury bonds, notes, and bills, as US equity markets continued their swan dives into the abyss. The sharp rallies of the past few weeks have been prime examples of bear market reflex rallies. They are based only on short-term oversold conditions and thus, do not have any lasting "investor" value.
Since the middle of the second week of February, for instance, the Dow Industrials have gained on 4 days, compared to taking losses on 13. So-called sharp traders aren't "buying the dip." They're instead catching many falling knives. Losses on the equity side are exacerbated by the rallies in treasuries, particularly over the past week.
This week, yield on the 10-year note fell from 1.97% to 1.74%. Over the same span, the five-year yield fell just five basis points, from 1.55% to 1.50%, crushing the curve, closing down the spread between 2s-10s from 42 basis points on the 25th of February, to 24 as of March 4. Bear in mind, at the start of 2022, that sprread was 85 basis points. It's been halved and nearly halved again.
Financial conditions are tightening rapidly and we are still 10 days out from the next FOMC meeting, at which time Chairman Powell will ostensibly announce a 25 basis point increase in the federal funds rate. That will shake markets to their cores, so there's no reason to hang around and wait.
Investors have been fleeing stocks and buying bonds in anticipation of a major market meltdown. All that has kept the Dow and S&P to following the NASDAQ deeper into bear territory has been the work of the PPT, Exchange Stabilization Fund, and the NY Fed's trading desk. The oh-so-obvious tape-painting in the final 10-20 minutes of trading every day is evidence of the desperation to keep the "America is winning" narrative alive at any cost.
It's not going to work. Along with Russia winning in Ukraine, the US and Europe are facing a devastating recession which could easily turn into a long-term depression. The inflation bugaboo is nearing its zenith. After oil touches $130-145 a barrel for WTI, demand destruction will render the economies of the Western nations to crisis levels. Prices will fall, as will wages, jobs, and confidence, which is already swirling the drain.
The dollar index shot higher this week, from 86.71 to 98.51, crushing all other currencies by comparison.
The aforementioned price of oil increased dramatically this past week. A barrel of WTI crude could be had for $91.59 last Friday (2/25). This Friday, $115.00. That helped push the national average price of a gallon of unleaded regular gas in the US up a whopping 43 cents in a week, from $3.60 to $4.03. In states from Maryland and Delaware North up the East coast, the average is over $4.00/gallon, along with the entire West coast, plus Nevada, Arizona, Michigan, and Illinois. Another two weeks, it will be almost the entire country. That is unsustainable and primary cause for a violent reactionary recession. The cure for high prices is even higher prices. Something will have to give.
Gold and silver were the big winners yet again.
Gold price 02/20: $1,900.80
Silver price 02/20: $23.95
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) rose over the course of the week, to $39.89, a gain of 20 cents from the February 27 price of $39.69.
With fiat currencies being exposed as subject to not just rapid devaluation, as in the case of the rouble, but also to confiscation, precious metals were in high demand.
Cryptocurrencies were bounced around, but eventually ended the week nearly flat. Bitcoin fell to a low of $37,020 last Sunday, rose to as high as $45,426 on Wednesday, March 2nd, as demand from Russia and Ukraine spiked, but eventually slid off to a current range around $38,771 as of this writing. Despite the usual no-coiner protestations, Bitcoin appears to be acceptably stable around $42-45,000 over the past year, despite swings well above and below that mark.
Currently, bitcoin fights a battle within itself between the 900 new coins mined per day, amounting to roughly $38 million in US equivalent and distributions versus new adoptions and accumulations. As such, bitcoin is still in a phase of inflation, tempered by adoption. The Russia-Ukraine situation aided the cause for adoption and should provide a rationale for, at least, inclusion in everybody's doomsday portfolio.
Russia continues to press the offensive against Ukraine and will likely continue to do so over the coming days and week. While conditions on the ground deteriorate for the Ukrainians, the West sees its global grip on monetary and economic power waning, first in Ukraine and Russia, eventually in China and throughout much of the less-developed world.
The need to establish alternatives to US hegemony have never been more obvious.
Gold, silver, and bitcoin must become more integrated into a rest-of-world system.
At the Close, Friday, March 4, 2022:
For the Week:
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