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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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Friday, September 29, 2023, 9:11 am ET Shame, shame, shame. Shame on the politicians for adopting polices that are contributing to the destruction of the economy and society. Shame on the businesses that have used government policies to inhibit competition and for pricing their goods and services at unaffordable levels. And, finally, shame of the millions of American consumers who have bought into the fraud and corruption, taking what the government gives, investing in the companies and products of which the government and businesses approve, without questioning the ultimate benefit and to whom the benefits accrue. Americans are faced with the prospect of the government shutting down and depriving millions of citizens of the things they were promised. A safe environment. Good jobs. Stable economy. Reasonable expectation of prosperity and old age pensions. The government has defaulted on almost all of their promises and are seemingly ready to shut themselves down. American should be cheering. Instead they are afraid and worried that the food stamps, the social security pensions, the cheap health care, and all the other ephemeral benefits to which they have become accustomed, will vanish. Unfortunately, should the government shut down Saturday night (September 30) at midnight, many of the most oppressive parts of the government will not go away. Congress will still get paid and continue to work towards a solution to fund their behemoth. The IRS will keep functioning. Food stamps will still be distributed. Social Security payments will be processed. The military will keep functioning, though mostly without pay. Since they are not part of the government, the Federal Reserve will continue to wreck the economy, with pay. Eventually, they will. It is at that point that Americans can begin to return to a more civilized society without the overbearing government and their propaganda, regulations, taxes, and deceit. It is likely to take a long time to convince people that government does them no good, though it is beginning to dawn on many that big government is the biggest problem they face and the proximate cause of most of the issues facing individuals and the country as a whole. A world without constant media badgering with the latest government concoctions and proclamations, without the taxes, without the IRS, the spiraling debt, the fake currency would be a much better place compared to the current malaise. That said, it's Friday, so let's look at where the phony wealth effect stands with stocks and fixed income. For the week, through the close of trading on Thursday, the Dow is down 297 points, NASDAQ is amazingly down just 10 points, and the S&P 500 is lower by 20 points. The more liquid NYSE Composite is down 91 points, while the tighter Dow Transportation Average has shed a mere two points. Treasuries haven't moved much, but they are severely elevated, with one-month bills approximating the target federal funds rate (5.25-5.50%) at 5.56%, Two-year notes are down six basis points on the week, yielding 5.04%, with yield on the 10-year note has rocketed 15 basis points, to 4.59%, a high mark since 2007. The 30-year bond has also blown out, yielding 4.71%, a gain of 18 basis points since last Friday's close. The Fed's favorite inflation metric, the Core PCE Deflator, slowed to 3.9% year-over-year in August (lowest since September, 2021). Headline PCE jumped up to +3.5% on a yearly basis, its highest since May, due to an uptick in goods inflation. This is likely to give the Fed enough ammo to raise the federal funds target rate another 25 basis points at the October 30 - November 1 FOMC meeting. Stock futures are screaming higher. At 9:00 am, Dow futures: +195; NASDAQ: +133; S&P 500: +28. Oil is up, with WTI crude pricing at nearly $93 dollars. For a change, gold and silver are higher, for now. Silver is up nearly three percent prior to the opening bell for stocks. At 90, Senator Diane ("just say aye") Feinstein has passed away. Cheers?
At the Close, Thursday, September 28, 2023:
Thursday, September 28, 2023, 9:23 am ET Wednesday's "stick save" performance on the major indices had - once again - all the hallmarks of the Fed's NY trading desk / PPT ramp job. To believe that the Fed or proxies of same aren't buying stocks directly is an extremely naive position that should be discarded out of hand. In this age of delusion and corruption, there's easily more unknowns than knowns. Traders, speculators and all levels of investors should be aware of the extreme conditions extant in financial markets, which are convulsing daily. Though insiders came to the market's rescue on Thursday, that did not prevent the technical damage done intra-day. The Dow was sunk to 33,306.30, a level not seen since June 1, and also one that is well below the 200-day moving average and any reasonable approximation of support on the blue chip index. The NASDAQ fell below the key technical level of 13,000, hitting a low on the day of 12,963.16, as close to being back in a technical bear market (-20%) as it has been since May 25. With the S&P having already begun the session in correction territory from the January 3 high, the slide to 4,238.63 in early afternoon trading spoke volumes about direction and the overall health of the "market." Clearly, stocks peaked at the end of July. August and September hav seen them beating a steady path to the downside. Staunching the fall and preventing yet another panic was a paramount task of the insider's cabal, which performed brilliantly, erasing the losses and leaving the S&P and NASDAQ slightly on the upside and the Dow with mere flesh wounds. The usual market pumping was never on more obvious display, 0DTE options managing to run up the flag for the show. It's not going to last. A crash of enormous magnitude - whether it takes place over a few days or many months - is written in stone. Between now and that eventual day of reckoning, there are likely to be a plethora of tradable ups and downs, though the type of nimble trading involved is not recommended for anybody seeking salvation from the gaping maw of debt and destruction ahead. Longer term strategies involving commodities and off-market asset accumulation are far preferable than day-to-day gambling at the casino. In the treasury market, as 10-year yields rose four basis points to 4.65%, flattening the yield curve and dis-inverting 2s-10s by fewer than 50 basis points for the first time in four months. As of this morning, with the 10-year at 4.63% and the two-year at 5.11%, the spread of -48 is screaming above recent spreads of -66 (last Friday, 9/22) and -69 (9/15). The 18 basis point move over the past four days is historic and volatile. Dis-inversion of the 2s-10s would put at least part of the cruve back in its natural state of up-sloping, left to right, shorter durations to longer. Don't count on it any time soon. Also, bear in mind that when rates do finally normalize marks the beginning of the next regime, that of disinflation and potential (probable) deflation and the associated maladies of a depression. While it's easy to allow recency and normalcy bias to align one's thinking, outside the box is where astute investors with longer views want to be. With every decline in stocks and living standards, gold and silver continue to be put down into the bargain basement. Gold slipped below $1900 and silver below $23 on Thursday. Further declines may be in the cards before the current wave of selling is done. As the opening bell approaches, Asian stocks were down hard overnight, European stocks are marginally positive except for the FTSE. Stock futures have turned negative, well off the mornings highs. Second quarter GDP was revised slightly higher, to 2.2%, and initial unemployment claims came in below expectations again, a continuing, suspect trend. Friday's restatement of GDP back to 2005 is likely to raise eyebrows, as is the reading on PCE, the Fed's BBF. Delish...
At the Close, Wednesday, September 27, 2023:
Wednesday, September 27, 2023, 9:19 am ET Based on hopes of the dysfunctional US congress agreeing on any of a number of bills to fund the government for the next week, month, three months or more, anybody who has an inkling for buying the current dip should immediately fire two live rounds into the trading platform on their computer, assuring they will not make what appears to be a bone-headed investment move. Better yet, execute some sell functions on losing positions before executing the computer. Congress will likely avoid a wholesale shutdown of the obese, deficit-addicted government, claim victory on Satuday night (September 30) and go have a party, like they usually do. Americans have seen this particular drama more than enough times and are weary of it, many wishing the senators and house represenatives would just give up and go away forever. The federal government has done so little for its constituents - who are, remember, not big pharma, banks, the MIC, lobbyists and other palm-greasing "contributors" - the citizenry, over the past 50 years, the country would likely be far better off without the hoard of meddlers, regulators, legislators, bribe-takers, grifters, and bureaucrats that have made living in America needlessly challenging. Utopia might be the word best suited to describe a country with low or no taxes, few, if any, regulations, no more of the constant media barrage covering the next evil deed the government is foisting upon the public, and a dearth of propaganda, lies, tranny displays, "mostly peaceful" violent protests, race-baiting, and war-mongering. One can only hope... and dream. In the meantime, Americans will suffer the fools in congress and the White House as they lead us down the road to perdition with open borders and open wallets (yours), promoting senseless wars, medicine that doesn't work, and policies that are misaligned with the country's priorities. The politicians will continue to prance and preen for the cameras, doing the bidding of their banking buddies, sending the country deeper down the black hole of debt, and with it, the stock market, standards of living, and purchasing power will all further deteriorate, as interest rates rise like a giant tsunami engullfing the entire economy. When the wave of interest rates finally recedes, what's left behind will be barren, misshapen, broken. Maybe, after all the financial and political carnage has reduced the United States to a condition somewhat below third-world status, pieces can be picked up, cheap, rebuilt, repurposed, repaired, and the rights guaranteed by the constitution protected by people's own defense instead of the facade of government goons that protect their pensions with more passion than they protect people and property. Still dreaming... Sorry to beat an ailing horse repeatedly, but the US economy is already flat-lining and what comes the rest of this decade has the potential to be downright nasty, manifesting in either a deep depression or hyper-inflation, or, the delightful choice of globalists from Klaus Schwab on down, a combination of both. There probably have been only a few times better than right now to divest or go short. Take a look at what the usually clueless (sorry if that offends some people) retail investor class has in mind:
Thanks to Visual Capitalist for the survey and to ZeroHedge for allowing Money Daily to copy the chart without permission, because they did. If the image does not display, go here. This chart is pretty much the exact opposite of what people should be buying (and selling). You can buy the top four: commodities, inflation protection, mid-caps, and gold and silver. Speculate on the next three: real estate, emerging markets, small caps, and sell or short all the rest: Large caps, electric vehicles, treasuries, and especially the bottom five of big tech, renewable energy, total stock market index, artificial intelligence (AI), and dividend investing. Those ranked the highest by retail investors (the chart is upside-down) are prime targets for short positions. Here's why: Dividend Investing: Stocks offering dividends are generally not yielding as much as 1, 2, 3, and six-month bills, all currently over five percent. Besides offering lower returns, the risk of the underlying shares losing value is an absolute negative risk. Has anybody looked at the perfofmance of the Dow lately? Sure, collecting a quarterly check on a three or maybe four percent yield is a well and good, but if the stock itself declines by more than that you are (choose wisely) either a loser, bag-holder, or just plain stupid. And what happens to that dividend when the company starts losing money? Simple enough. Artificial Intelligence: Complete scam. Adds little to no value to anything as it's based entirely on existing knowledge. Total stock market index: The S&P just re-entered correction territory off the 2022 highs, the NASDAQ is still down 17% from November, 2021, and the Dow is one percent away from a 10% decline off the January 2022 highs. The bear market wich began in January, 2022 never ended. The rally from October, 2022 to the end of July this year was nothing more than a cyclical rally in a secular bear market. It has peaked and will continue to decline. Renewable Energy: When solar or wind-driven cars become a reality, that's the time to dive in. Until then, renewables are a pipe dream of clueless progressives and evil globalists. Don't misinterpret that statement. Renewables have their place, especially solar, but they will not permanently replace oil and distillates. Big Tech: Big bubble about to get popped.
Make your own decisions, or, be a good Recapping Tuesday's knee-capping, the markets were overdue for this kind of decline. Stocks have been in distribution phase for months, now comes the wholesale flushing. As mentioned above, the S&P is now down 10.91% from the all-time high (4796.56, 1/3/22), the Dow is down nine percent from its ATH, the NASDAQ is headed back to bear market status (down 18.64% from 11/19/21, 16057.44). The Dow and the NYSE composite each ended the day below below their respective 200-day moving averages. The other indices are moving in a similar direction as the bear market cycle has entered the second phase, which will be a slow, tortuous grind lower, prior to phase three, capitulation, when all investors throw in the towel. That should come next year, probably in the second half. For today, stock futures are clinging to dead-cat-like gains pre-market. Asian and European stocks were mixed, but modestly higher. Oil is up, gold and silver, down, the euro is being crushed, again, currently at 1.054 to the US$. The 10-year note is yielding 4.56%. Yikes! Happy trails...
At the close, Tuesday, September 27, 2023:
Tuesday, September 26, 2023, 9:00 am ET In what appears to be a mad dash for the exits in the bond market, yields spiked on Monday as stocks took a back seat to curve steepening, which now seems to be endemic. At the extreme, 30-year yields blew out to 4.67% and the 20-year yielded at a high of 4.84% as rapacious selling ravaged the long end of the curve. At the short end, bills and notes out to two years didn't budge, with 30-day notes up two basis points to 5.54% and two-year notes yielding 5.09%. At the crux of activity was the benchmark 10-year note, adding 10 basis points to 4.55%, its highest level since the GFC of 2007-09. The affront to long-dated maturities accelerated the path back to normalized rates, as the inversion between 2s and 10s fell to -54 basis points. For perspective, this measure was -106 on June 30, the depth of inversion essentially cut in half over the course of the thrid quarter. What's causing the massive outflows from long-dated notes and bonds are primarily three factors: fear of an impending government shutdown on October 1, just days ahead, and, advancing shedding of treasuries by foreigners and aligned traders, many of which are dumping deeply underwater positions in favor of short-term bills with higher yields, and banks holding underwater securities. These short-term notes are preferable in the current environment as they can be readily held to maturity with little risk, all the while paying premium rates above 5.50%. If there ever was easy money to be made, 30, 60, and 90 day bills are there for the taking. Adding to the long-end rout are banks of all stripes, saddled with instruments purchased prior to the Fed's relentless rate-hiking regime, losing value before, during, and after every FOMC meeting since March 2022. Making the boneheaded decision to invest in securities yielding a mere one to two percent, smaller banks, under pressure from depositor flight to money markets and higher-paying CDs, have been forced to sell at substantial losses. Such behavior was first evidenced back in March, when smaller banks began to suffer a liquidity and solvency crisis, with three fairly substantial banks failing within weeks of each other and forcing the Federal Reserve to institute a bailout facility for a slew of troubled institutions. This particular bad money parking lot known as the Bank Term Funding Program (BTFP), jokingly named "Bailout The F--king Putzes", "Buy The F--king Printer", and other insulting acronymical monikers, grew from zero at its inception to nearly $80 billion in just the first month of operation (see chart), from March 8 to April 5 of 2023. Since then, the inflow has ebbed, with the fund now holding $107.6 billion in marked-down securities. The BTFP allows banks to borrow from the Fed at the one-year overnight index swap rate (OIS, 4.33-5.88% over the past year) plus 10 basis points for a period of one year, pledging their treasury or mortgage-backed securities as collateral. The kicker is that the banks are allowed to value these securities, many worth 30% to 60% less than par, AT PAR, for purposes of the loan, the hope being that the troubled banks could make payments on the loan and remain solvent. Without this facility, it's likely that half of the local and regional banks would have by now been insolvent and forced to declare bankruptcy or be swallowed up by larger rivals, some of which has already occurred. In a nutshell, the banking crisis which began in March is still underway, gathering steam towards the first and second quarters of 2024, when many of these loans will come due and the collateral called. There's slim chance of the Fed lowering interest rates by enough to raise the value of the collateral bonds, notes, and bills by them, opening the door to an extended crisis, emergency rate cuts, bank failures, and massive losses. Conversely, the Bank for International Settlements (BIS) is the latest to warn of the risk imposed by an aggregate $600 billion short on treasuries by hedge funds, the crowded trade a major concern in the event of an abrupt revaluation in five and ten-year notes. The banking conditions and hedge fund short positions aren't just potential potholes on the road to financial ruin, they could become gigantic craters. These are just a few of the financial realities behind the scenes of everyday life in Western economies. Naturally, the issues are far beyond the grasp of average citizens, who rely on the Fed and other central banks to provide a smooth-functioning system. Presently, they are getting anything but that. With money as tight as it has been in more than 15 years, a liquidity crisis looms dangerously over the heads of central banking operations, their final hope being that a severe liquidity crisis doesn't become a solvency issue, threatening their very existence. In the end, whether it be in a few months or a number of years, the implosion of the fractional reserve fiat currency banking system is a mathematical certainty. The chaos is spreading quickly, appearing now across the fixed income spectrum and beginning to manifest itself in leveraged positions in stocks. As trading approaches on Tuesday, stock futures are falling out of bed, with Dow futures down 151, NASDAQ -80, S&P -23. Asian stocks were uniformly lower overnight with European stocks mixed and trending lower, the FTSE the only index holding gains, and they are slight. Oil is down, gold is down, silver is down, the dollar is down. End game approaching.
At the Close, Monday, September 25, 2023:
Sunday, September 24, 2023, 12:25 pm ET The question isn't "if" the economy will crack, unemployment will spike, the US dollar as a viable currency ceases to exist, the lunatics loose from the asylum run the government and the country into the ground, and finally wreck everything, but "when." America's demise is an absolute surety. The country is far removed from the halcyon days of being the world's industrial powerhouse. Federal Reserve Notes, the accepted currency, have lost 98% of their value. Elections are rigged. Politicians are on the the take. The borders are wide open. Major cities have been reduced to nearly inoperable levels, replete with rampant crime, lawlessness, corruption in the highest offices. What used to be a beacon of freedom and prosperity has become an unsustainable welfare state, funded by borrowing of both time and money, and the country is running low on both, along with patience. There are those who believe the people can vote themselves out of this mess, while there's ample evidence to the contrary. Oppose the power of the sociopaths and you'll end up in ruins, in jail or worse. Take a look at the January 6 prisoners. Nobody wants to talk about that. Those are political prisoners made an example of by the most corrupt, ill-tempered, loathsome government in the world. Antony Blinken, the Secretary of State, wants to fight wars with both Russia and China, at the same time. The country is neck deep in the self-created morass of Ukraine with few prospects of peace or compromise. And just this week, New Jersey Senator Robert Menendez was indicted on a variety of charges, including bribery, conspiracy to commit fraud, and extortion. He's far from the exception in a congress chock full of grifters, liars, and palm-greased felons. He just managed to get caught, again. Amid all of this, the United States is suffering through the most perilous of times. Honest voices are routinely censored. Inflation has destroyed household budgets and will soon seep through to the corporate level. Small businesses not already shut down during the pandemic are facing extinction. The Bill of Rights is under constant attack by elected officials and their lapdog media. Trust is gone. What are honest people to do? Probably the best advice offered comes in the form of one word: prepare. Prepare for about the worst outcomes you can imagine, because what will unfold in the next few years may possibly exceed it. There are a myriad of ways to become ready for the mother of all unwinds, but this is not the space in which to discuss that. Today is devoted to showing the increasingly obvious signs of imminent collapse of the financial mechanisms that have kept America on top of the world for so long and maybe offer some guidance toward protecting your assets. Prepare. Stocks Stocks took another beating this week and the declines which began in August have become undeniable and possibly unstoppable. Here are a few numbers that most of the mainstream financial media may discuss only in passing, if at all: Since July 31, the Dow Jones Transportation Average is down 10.34%, the very definition of a correction. The NASDAQ, since its all-time high of 16057.44 in mid-November 2021, has never left correction territory. It has always been down by 10% or greater. It came close at the end of July, but is, as of Friday's close, down 17.72%. It's down more than seven percent in just the past seven weeks. All of the major indices, including the NYSE Composite and the Dow Transports, closed below their mid-August lows. All of those indices are within one percent of falling back into correction from the January, 2021 highs. As mentioned above, the NASDAQ and Dow Transports are already there. Despite all of this, these indices remain well above levels prior to the pandemic, circa February, 2020, despite deteriorating economic conditions since then. For instance, the official inflation gauge, CPI, was 2.3% in February, 2021. Since March, 2022, it's been above that level, a period of two-and-a-half years, peaking at 9.1% in June, 2022, and beginning to rise again. Industrial production peaked in September 2018 at 104.11 and has never regained that level.
The ISM Purchasing Managers Index (PMI) has been signaling contraction for the past 11 months (September was 48.9) Bear in mind that these figures and charts are all government-produced, thus, subject to any degree of political influence, fudging, massaging, and, eventually, revision. It's very likely the degree by which the economy is expanding (if not contracting) is wildly overstated. Whether the economy is expanding or contracting is usually measured by GDP, which is outdated and not a good representation of real economic conditions in the public sector. GDP is measured by adding up Personal consumption, Business investment, Government spending, and Net exports (exports minus imports). Besides the disturbing notion that federal government spending as a percentage of GDP in 2020, 2021 and 2022 was 31%, 30%, and 25%, respectively, there's double counting, since government at all levels buys (spending) goods and services from domestic suppliers. In any case, it's not a very good measure of the health of the economy, doesn't capture the underground economy at all (cash, drugs, payola, bribes, etc.) and the inclusion of government expenditures actually warps the entire calculations. On top of everything, the federal government continues to run massive deficits, adding to the debt time bomb, which recently surpassed $33 trillion.
The federal government hasn't run a surplus since 2001 and 2023 will produce a nearly $2 trillion deficit, the third highest ever. if there was a category for "out of control," it would include government spending and debt. The economy runs on debt. With debt becoming a massive burden, it's only a matter of time before the entire bankrupt system implodes, which, judging by inflation, it's already doing. Stocks, which by almost any measure are overvalued, but are especially so in comparison to the nearly risk-free returns offered in debt markets.
If an inverted yield curve always forecasts a recession, does an inverted yield curve for a longer time forecast a depression? Could be. Read on. There is historical precedent, as the longest known yield curve inversion occurred between September 1926 and May 1930, a period of roughly 3 1/2 years. This article by the blogger, The Economic Populist outlines interest ates and inflation during the 1920s and 30s. The information provided is valuable and well-researched. What happened between 1926 and 1930? Boom, bust, Great Depression. The current inversion was foreshadowed by a brief blast that took the 2-year yield up 16 basis points to 2.44% on April 1, 2022 (no, not kidding), while the 10-year note rose only seven, to 2.39%. That was a Friday. By Tuesday of the following week, April 5, the matter had quickly and quietly been resolved, with the 2-year closing at 2.51% and the 10-year at 2.54%. Notably, all rates were rising as the Fed had just begun their interest rate hiking cycle in March, and, 7s-10s, which first inverted on March 11, remained inverted throughout and until 2s-10s re-inverted. This nearly normalized cruve persisted until July 5, 2022, when 2s and 10s leveled out at 2.82%. The following day, July 6, marks what may be regarded as the beginning of the long inversion, when the 2-year yield jumped 15 basis points, to 2.97%. The 10-year advanced only 11 basis points, to 2.93% and this condition, with 2-year yields higher than those of the 10-year, has persisted ever since. Additionally, 3s, 5s and 7s were also yielding higher than the 10-year and are still today. All of this data can be accessed from the US Treasury web site. Since the initial inversion of 2s-10s, the condition has only gotten worse, to a point that the 10-year yield is the low point of the curve, surpassed by all other yields, from 30-day bills out to 30-year bonds. With the 2s-10s inversion now approaching 16 months, it's safe to say that rates aren't going to normalize (un-invert) for quite some time, the length of inversion possibly positively correlated to the depth of the next recession (or depression). For now, it appears that interest rates will remain high, and inverted, through all of 2023 and well into 2024, a period of yield curve inversion that would begin to rival the period preceding the Great Depression. It appears that the longer rates are inverted the worse the crisis that follows will be. Spreads this week improved again, with 2s-10s continued to creep closer to normalizing, though still far away, at -66 basis points. This trend covers the past week (-69) and the week before (-72). At a pace of three basis points per week, 2s-10s would normalize in 22 weeks, though it's unlikely that rates would follow a straight path. They haven't, and they probably won't. The complete curve, AKA, full spectrum (30-days out to 30-years) improved markedly, to -99 basis points, from -109 last Friday and -119 two weeks ago. (apologies for mis-stating the inversion of 30-day/3-year at -119 and -122 last week). This is also improving at a rapid rate. Could the Fed, via treasury yields, be pointing towards normalizing in early 2024, somewhere between 11 (30s-30s improving 10 basis points per week) and 22 weeks (2s-10s, three basis points/week)? Time will tell, but that seems unlikely. Capital markets are enormous and have been more volatile recently than is the norm. In the most general terms, banks, finance companies and shadow banking entities like PayPal, Stripe, Discover, Capital One and others have to employ the best heads in finance to remain out of trouble. Regional banks continue to be hard hit due to their lack of resources, size, and general commitments to commercial real estate. For lenders of all stripes, the current conditions in interest rates are challenging and disruptive. For consumers, higher yields make for happier retirees and those who view stocks with skepticism. With money markets, CDs and even deposit accounts now offering rates over four percent, the competitive environment has made keeping money safe a welcome relief after years of the lowest rates in generations.
WTI crude oil closed out the week's trading in New York Friday at $90.33, a rare decline of seven cents on the NYMEX. Daily peaks this week routinely occurred early in New York trading, with the highest at just below $92 on Tuesday. Price spikes were followed by sharp contractions, as there is certainly a good deal of hedging and profit-taking in the mix. Where oil prices go from here seems to be pointing higher as supply is being dented by Russia and Saudi Arabia in the main, both of which kept on with production cuts and remain steadfast in maintaining them. Along with the US strategic oil reserve nearly cut in half by the wrong-footed Biden regime from January 2020 to June of this year (638 million down to 347 million barrels), there now exists ample opportunity for US companies to ramp up drilling operations, which they have. The competing East/West forces may result in an oil price stalemate. Certainly, most everybody other than end consumers can be satisfied with oil at $90-100 per barrel, though the oil hawks at Goldman Sachs, Morgan Stanley and elsewhere are touting prices exceeding $100 in the near term. That may happen, but the stress imposed on the economies of all nations (those forced to purchase at those prices) would be negatively affected. Fuel prices were the main driver of inflation in the August CPI reading and they are likely to be again for September. Crude prices are up roughly eight percent this month. The US national average for a gallon of unleaded regular gasoline fell by five cents over the course of the past week, to $3.81. According to gasbuddy.com, Mississippi maintained the lowest price for fuel at the pump, $3.24, down four cents from last week. Following are Georgia ($3.25), Louisiana ($3.37), South Carolina ($3.32), Texas ($3.35), Alabama ($3.36), and Tennessee ($3.36). Florida dropped by a penny, to $3.56. California remained the most expensive of all states with gas up another 20 cents in just a week, to $5.79 a gallon. Elsewhere, prices eased in with Washington ($5.01) and Oregon ($4.63), but Nevada ($5.04, up 28 cents) and Arizona ($4.66, +13 cents) were higher over the week, with Utah ($4.21, -8 cents) and Idaho ($4.10, -2 cents) lower. Prices continue high in Montana, though down three cents, to $4.16 this week. Those eight Western states comprise the $4.00+ club. In the Northeast the highest gas prices remain in Pennsylvania ($3.91) and New York ($3.89), both up just one cent. The lowest prices in the region can be found in Kentucky ($3.46) and Ohio ($3.42). Illinois ($3.87) leads in the Midwest, with North Dakota and Minnesota at $3.86, followed by South Dakota ($3.82). Bitcoin
This week: $26,598.60 Bitcoin has settled into a range between $25,000 and $30,000 for the past six months, since mid-March. Whether or not that is meaningful depends on one's own outlook on the nature of crypto. To some, it may indicate the relatively stable price of the coin. To others, it's a harbinger for the next leg up in 2024, to $35,000 or higher. Talk of $100,000 bitcoin has just about faded into the memory hole, where it belongs. Most of the world still isn't sold on the crypto story.
Gold:Silver Ratio: 81.65; last week: 83.47 Per COMEX continuous contracts:
Gold price 08/25: $1,943.30
Silver price 08/25: $24.64 Silver took off like a rocket this week, gaining over two percent, peaking at $24.04 on Friday before settling back to close at $23.82, up an impressive 51 cents, and outperforming gold, which was essentially flat, losing 70 cents per ounce on the week. Both metals remain close to near-term bottoms, however, which can be regarded as good news for anybody interested in acquiring more, adding to stacks, and preparing for the eventual shift from fiat currency to "old fashioned real money," i.e., back by gold and/or silver. Now a month out from the BRICS conference and Fed's Jackson Hole symposium, a most likely scenario is evolving, wherein BRICS+ - once the six new nations will be welcomed into the fold on January 1, 2024 - will engage in wholesale shedding of US assets, reducing their reserves of such to bare minimums needed to continue trading with Western nations. The more the US presses forward with sanctions and the repulsive continuation of hostilities toward Russia via Ukraine and China via Taiwan, the further removed will be Asia, Africa, and South America. US influence throughout the rest of the world is obviously waning and recent efforts to woo smaller, emerging nations back into the fold of Western hegemony are likely falling upon deaf ears. With charlatans like Joe Bribem, VP "Heels up" Harris, Jake Sullivan, Antony Blinken, Victoria Nuland, and presidential spokesperson, Jean Luc Ponty (or whatever her name is) operating the government, the wheels appear to be beginning to come off the neocon wagon train. Recent exploits like Nuland and Harris' carousing around Africa, Blinken's complete lack of diplomatic protocol, and Biden's speech at the UN and follow-up meeting with Blinken and leaders of central Asian nations Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbekistan came off as loud-mouthed rhetoric from dethroned, former leaders and "too little, too late." Now that multi-polarism has taken flight, the shift toward natural alliances based upon geography and mutual respect leaves the United States isolated with its European and Commonwealth (Britain, Canada, Australia, New Zealand) partners. Uzbeks, Kazahks, et. al. want little to do with hegemons and are bolstering ties in their region with China, India, and Russia. Here are the most recent prices for common one ounce gold and silver items sold on eBay (numismatics excluded, free shipping included):
The Single Ounce Silver Market Price Benchmark (SOSMPB) rebounded sharply this week, up $2.78, to $37.74, from the September 17 price of $34.96 per troy ounce. Buyers - and silver buyers especially - should be aware of frauds on eBay. This week's survey passed over offerings from China and other low-priced items from sketchy sellers. Being as large as they are and so focused on profit as motivation, eBay devotes few resources to fighting fraud, especially in the bullion space, which is a profit center for the auctioneer. There are well-identified, reputable dealers on eBay, including most of the online retail outlets. Prices are actually lower at the retail sites than on eBay, due to excessive fees, so buying from mints like Scottsdale or Perth or retailers, like Apmex or Bullion Exchanges makes more sense than ever. If the price of silver rises much more, expect more fraud and counterfeit items with less than pure metal in them. Caveat Emptor. WEEKEND WRAP Finally, we get to focus on what's important as th world careens toward the end result of clown world politics and corruption in the West. Stocks continue to look quite risky, given extreme valuations. Fixed income is fine if one is only concerned with almost keeping pace with inflation, but there may never be a time when it's so vitally important to acquire and preserve hard assets. The current inflation is likely to be followed by wholesale collapse, deflation, and a deep recession or depression. No matter the value of currency, which continues to erode in fiat terms, land is still land, potable water will remain valuable, and reliable transportation, food resources, and items with practical value will always be essential for a life of happiness and prosperity. A revaluation of gold and silver are likely in coming years, and both should be considered as a means of escaping debt bondage as well as being stores of value and mediums of exchange because, as they have been for thousands of years, the only real money. The loathsome US congress may engineer another phony government shutdown this week over the inability to pass even a 30-day funding bill. There was a time, not that long ago, when the government actually ran off of a reasonable budget, but, since 1971, the federal government has run a surplus only three times (1999, 2000, 2001) and has been operating on continuing resolutions and other legislative legerdemain for two decades and yet, deficits continue to rise at extraordinary levels. Years and years of excess must come to an end at some point, a point which appears to be approaching with all due alacrity. 52 years of global fiat currency reign will also cease. The probable outcome is for both to end at roughly the same moment in history. That moment is approaching. Prepare.
At the Close, Friday, September 22, 2023:
For the Week:
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