Author: admin

Authored by Joakim Book via The American Institute for Economic Research,

In August 2018, Greta Thunberg first began skipping school to protest outside the Swedish parliament. Almost two years later, her fame is global; everybody knows her name, climate activist or climate change denier, politician, or janitor. 

The relentless rise to international fame for this teenager – becoming Time Magazine’s Person of the Year in 2019 – was cut short only by the corona pandemic. Media teams followed her through lockdown, where she eagerly expressed her love for learning and repeated her frequent message of listening to the learned.  

Now, however, she’s back, crushing the audience records of the Radio Sweden show “Summer in P1.” This 60-year-old tradition consists of a public figure given free range for 90 minutes to tell the story of their lives and choose the appropriate music that accompanies it. Monologues by these hosts, often musicians, politicians, business leaders or cultural personalities of one kind of another, are often deeply personal. Once a day between June 20 and August 16, the host of the day tells us about their great adventures and emotional journeys.  

When Greta Thunberg became internationally renowned for her climate activism last year, it was only natural that Radio Sweden – with the same biases and skewed climate emphasis that Americans may recognize from NPR or the pages of the New York Times – would jump at the chance of hosting Greta. Starting off this year’s round of summer hosts, her show broke all previous records: over a million Swedes, a tenth of the population, listened to her show, and the BBC will broadcast the English version on July 11. 

The format is no stranger to difficult topics, both politically and personally. Usually, the themes are biographical and very emotional: celebrities have been known to unearth secrets and talk about the most intimate of feelings. To this day, the lugubrious words of Kristian Gidlund, the drummer in the band Sugarplum Fairy, still bring me to tears. Having been diagnosed with an incurable cancer in his twenties, Gidlund hosted the show in June 2013, just a few months before he died. Most memorably, he read a letter to the beloved child he will never have, imagining his or her life and Gidlund’s journey as a parent.

Greta’s talk is less grim but equally powerful – and one of the better ones she’s given. As a fellow Swede, I’ve always admired her devotion and seeming aura of calmness and factfulness. Throughout, her programme is delivered in a calm voice, balanced and sane, even though the topic she addresses is huge and cataclysmic. Remarkably, with all the world’s attention over the last few years, she has avoided delusions of grandeur and resisted having her self-image distorted. 

Or at least so she says. I distinctly recall her World Economic Forum statement, where she said “Our house is on fire,” and where climate change was “the greatest and most complex challenge that Homo Sapiens have ever faced.” When she ushered world leaders to panic, she wasn’t exactly balanced and calm.

In this longer-form talk, she dismissed most of the interactions she has had with world politicians as futile virtue-signaling. The listener can clearly detect Greta’s detest for people talking the talk but not walking the walk. Bureaucrats and journalists are eager to snap selfies with the face of climate activism, but take almost no actions in their ostensible support of said climate activism. Hashtags and Instagram pictures won’t do, Greta repeatedly points out, her voice full of frustration and discontent. 

She recounts her much-publicized United Nations speech, from which everyone mistakenly took away only “How dare you,” when her intended message was: “We don’t accept these odds” and “Listen to the scientists!” She tells of meeting after meeting where people, politicians as well as strangers on the subway, wish to congratulate her on her speech and celebrate her achievements: “What for?” she exclaims, noticeably surprised and annoyed, “Another meeting is over; empty words are all that remain.” 

And in those few words, she captured the essence of politics. 

Repeatedly during her show, she asks us, commonsensically, to listen to the science. The problem, she explicitly admits, is of course which science. In contrast to what Greta seems to believe, environmentalism is not a question of climate scientists vs climate deniers – that ship, as she persuasively points out, has sailed. Unfortunately, she overlooks the more difficult battle between the sciences and how the object of their inquiry interacts with human societies. Economy is not ecology. 

While the full details are fuzzy, the impact that humans have on our world is pretty clear: our carbon-using activities leading to glaciers melting, storms getting worse and unpredictable, harvests and agricultural cycles being altered. That’s not controversial and, to my knowledge, in this Greta is mostly correct. 

The science about how best to safeguard human flourishing, however, is controversial and a topic that the teenage activist rarely addresses. How climate change affects human societies and how best to protect us against a slightly changed nature is far from clear. According to the climate models of William Nordhaus, the co-recipient of the 2018 Nobel Prize in economics, the optimal rise in global mean temperature is around 3.5 degrees Celsius – much higher than the 1.5-degree target espoused by the UN and echoed by Greta. Perhaps Nordhaus is wrong, but he’s hardly a climate change denier, and he has at least thought long and hard about the aggregate pros and cons of a warmer planet.

Many of the topics that Ms. Thunberg raises are real ecological dangers – she’s serious and honest enough not to make stuff up. But they’re much less troublesome than she thinks, and many available solutions are vehemently detested by her fellow climate activists: nuclear power, geoengineering, economic growth, capitalist innovation.  

Indeed, adopting policies that severely cut back humanity’s use of fossil fuels such that the 1.5-degree target would be achievable, are likely to make humanity much poorer than not doing anything at all. As we’ve learned recently from the corona debacle, cures are often much worse than the disease they intend to fix. 

In contrast to the cataclysmic nature of Greta’s talk, humans have never been more well-protected from the awesome power of mother nature. Damages from U.S. hurricanes, adjusted for population and prices, have shown no upward trend in the last 120 years. Damages from wildfires, so vividly in the news last year, have similarly not been made worse by anthropogenic climate change. 

Economic losses due to weather events, composed of both naturally-occurring events and any human-made worsening through emissions, have actually been decreasing over the last thirty years. Similarly, the number of people who die from climate events (floods, storms, droughts etc) has been rapidly falling for a hundred years. While human-made climate change seems to have altered our environment roughly in the ways that Greta outlines, we have at the same time gotten much, much better at protecting ourselves from those extreme events. In no small feat thanks to the fossil fuels that activists detest so much, we have been able to tame nature’s most devastating harms. 

This is the science Greta forgets about. 

My favorite paragraph from an IPCC report that Greta frequently cites and a sister report to the one she famously delivered as testimony to the U.S. Congress reads: 

“For most economic sectors, the impact of climate change will be small relative to the impacts of other drivers (medium evidence, high agreement). Changes in population, age, income, technology, relative prices, lifestyle, regulation, governance, and many other aspects of socioeconomic development will have an impact on the supply and demand of economic goods and services that is large relative to the impact of climate change.” (emphasis added)

Perhaps Greta’s message for politicians to listen to the scientists and take real action has hit home. In one sense, they are already well on the way to following her advice. They read chapter 10 of IPCC’s AR5 report, where they learned that climate change is important – but that other socioeconomic developments matter much more.

The US economy has stalled as the virus pandemic flares up. Real-time data shows slowdowns in consumer foot traffic, restaurant foot traffic, discretionary income, and overall economic activity as virus cases rise in 38 states. 

The US reported its largest single-day caseload increase on Friday, with more than 67,000 new confirmed cases. Six states (Arizona, California, Colorado, Florida, Michigan, and Texas) have seen a surge in cases over the last month – governors in these states are reversing reopening plans, with 15 more states pausing reopenings. 

On top of rising cases, the death toll in the US rose last week for the first time in months, as hospitals in the sunbelt and coastal states become inundated with virus patients. The country reported 4,200 deaths in the last seven days. Virus-related hospitalizations have surged to levels not seen since May, a troubling sign for hard-hit states that suggest the trend will worsen through July. 

The reemergence of the virus cases, forcing governors to pause or reverse reopening plans have stalled out economic activity and risks the shape of the recovery being downgraded from a “V” to “U” or even the dreadful “L.” Also, a looming fiscal cliff risk crashing consumption as more than a quarter of all personal income is reliant on direct deposits from the government.  

Courtesy of Capital Economics, which has compiled a handy breakdown of real-time US indicators, we can see the full extent of how the recovery has stalled. 

Consumer foot traffic for casual dining and malls have yet to revert to pre-corona levels as the bounce stalled in late June. Foot traffic for auto dealers and big-box retailers have almost returned to January levels but plateaued in the same period.

Restaurant foot traffic (measured in person % Y/Y) remains collapsed with recovery stalled through June and reversing in July.

Discretionary consumption (% Y/Y) shows continued depression for air travel, restaurant diners, and hotel occupancy. 

The NY Fed’s Weekly Economic Index does not support the V-shape narrative the Trump administration routinely touts on Twitter.

The stalled recovery is set to pressure employers who will be forced to layoff another round of folks. Americans will be staying home this summer and not traveling as the virus-induced recession has wrecked their finances.   

It’s becoming evident the virus and or the emergence of cases can influence economic recovery shape. Damage from the downturn is widespread, with permanent job loss and deep economic scarring set to derail the recovery.

Here’s Gary Shilling, the president of A. Gary Shilling & Co., take on what could be next for markets as investors figure out the shape of the recovery is an “L.”

“I think we’ve got a second leg down and that’s very much reminiscent of what happened in the 1930s where people appreciate the depth of this recession and the disruption and how long it’s going to take to recover,” said Shilling. 

Shilling said today’s stock market bounce from March lows resembles the initial dip then rebound in 1929 – and we all know what happened next… 

The Fed and Trump administration better unleash another round of MMT or a double-dip recession is ahead for the back half of the year.  

For more color on the stalled recovery via real-time data, here is Bank of America’s latest credit and debit card spending trends. 

Authored by Renée Parsons via Off-Guardian.org,

If given the choice between maintaining a toxic world of fear, pollution and violence controlled by the State or a society of prosperity and compassion based on freedom and individual rights, there is little doubt that the majority of Americans would want the old paradigm of synthetic events to take a hike; except that choice has been distorted under the guise of what the World Health Organization (WHO) has mislabeled the most deadly virus in history.

The coronavirus crisis arrived in a flash with little time to analyze exactly WTF was going on. Americans struggled to process what is real, trustworthy and authentic as the unraveling of deep political decay revealed a behind-the-scenes subterranean power struggle that has surfaced with the intent on disintegration of American Society.

While the country is fast approaching an existential crisis on steroids, millions experienced an inner knowing that some indefinable thing was not right with recognition that the early explanations were hogwash while others, addicted to mainstream/social media who still believed in the illusion of democracy, were on board with the litany of spin from the medical and political establishment.

While the Lockdown could have been a wake up call for humanity to change its consciousness with a paradigm shift – whether it be a spiritual awakening, a political realignment or re-evaluating one’s own personal health choices, since, after all, humanity was locked in a major health crisis. And most importantly, it was an opportunity to acknowledge that the planet itself is ailing from abuse and neglect with CV as a metaphor urging a personal reconnection with Nature.

In early 2020, Neil Ferguson of the UK’s Imperial College used a scare tactic to predict that 80% of Americans would be infected and that there would be 2.2 million American deaths – neither of which materialized. Yet Ferguson’s extremism accomplished its intended purpose in establishing the basis for draconian Lockdown requirements. Ferguson later retracted his earlier prediction down to 20,000 fatalities.

With current infection fatality rate at 0.20%, Lockdowns have been devoid of science and are based on arbitrary, contradictory and inconsistent requirements.

Just a few examples come to mind, such as liquor stores and big chains are considered ‘essential’ and remain open but stand-alone, independent, mom ‘n pops are not. Barbers may be open but hair salons may not. While it is advised to get tested for Covid19, a colonoscopy or other elective surgery are not allowed. While vitamins C and D and Sunshine strengthen the immune system, all outdoor sport programs have been canceled.

In an unexpected development, a recent JP Morgan study asserted that the Lockdowns failed to “alter the course of the pandemic” as it “destroyed millions of livelihoods” and that as infection rates ‘unrelated to often inconsistent lockdown’ measures decreased, fewer outbreaks were reported as the quarantines were lifted.

As the official narrative of the Covid19 as an existential threat has collapsed, it is interesting to follow how ‘hot spots’ occur just as a particular State, like Florida, announces re-opening.

Those new hot spots encourage a reinvigorated debate over mandatory face masks and social distancing with its success depending on a duplicitous media instilling panic and a naive public still believing Covid19 to be more dangerous than seasonal flu.

WHY LOCKDOWN ASYMPTOMATIC CITIZENS?

Dr. Maria Van Kerkhove, technical lead of WHO’s COVID19 Task Force threw a monkey wrench in the works recently by stating:

what we really want to focus on.. if we followed all the symptomatic cases, isolate those cases, follow those contacts and quarantine those contacts, we would drastically reduce..transmission. We would do very, very well…”

Dr. Van Kerkhove then explained that transmission of the virus from asymptomatic patients appears to be very rare:

It still seems to be rare that an asymptomatic person actually transmits onward to a secondary individual.”

The next day, there was panic at the WHO but Dr. Van Kerkhove’s uncensored comments were very clear as they validated questioning the purpose of the entire Lockdown process. If an asymptomatic person is not spreading the disease but might publicly increase herd immunity, then why wear a face mask or be quarantined?

House Speaker Pelosi called for a national mask mandate as HHS Secretary Azar reported that Pence and Trump are tested daily and are asymptomatic; therefore not required to wear a mask.

WHY FACE MASKS?

To date, there is no standard for what constitutes a ‘safe’ face mask or instructions for disposal considering that a used face mask will be a contaminated bio-hazard material; ergo a face mask is more of a device to require citizen compliance than a safety precaution.

Adding a partisan narrative to the crisis, the most expansive lockdown restrictions (some with criminal penalties) came from predominantly Democratic Governors and Mayors who offered no science or forensic data to prove that either mandatory face masks or home sequestration have failed to prevent a spread of the virus.

During a House Oversight committee meeting, the mask debate broke down along party lines with Dems dutifully covered while strenuously objecting to their mask-free peers.

A riveting June 23rd Palm Beach County Commission public hearing on a proposed Mandatory Face Mask ordinance drew overwhelming opposition.

While OSHA’s (Occupational Safety and Health Agency) responsibility is to oversee the health and safety of every American worker as each workplace is expected to comply with OSHA standards, its website regarding COVID19 states that cloth-based face masks

will not protect the wearer against airborne transmissible infectious agents due to loose fit and lack of seal or inadequate filtration.“

OSHA goes on to inform that a safe level of oxygen must be maintained as an oxygen deficient atmosphere (defined as below 19.5% by volume) creates a respiratory risk.

While there is no sound science or evidence to prove the benefits of mandatory usage, the NE Journal of Medicine reported that:

We know that wearing a mask outside health care facilities offers little, if any, protection from infection […] The chance of catching Covid-19 from a passing interaction in a public space is therefore minimal. In many cases, the desire for widespread masking is a reflexive reaction to anxiety over the pandemic.”

More recently, NIAID Director Dr. Anthony Fauci declared masks as largely ‘symbolic’ as he was setting an example for what other people should be doing.

There’s also a “Risk of Hypoxia to All Mask Wearers” according to Drs. Russell Blaylock and Zach Bush.

SOCIAL DISTANCING AKA QUARANTINE

With not a whit of science in support, Social Distancing which is a mutually exclusive phrase since there is nothing social about enforced distancing from other humans, has been attributed to a CIA protocol in use since the 1950’s to break a prisoner’s resistance or a teenage science project.

In any case, SD has proven a great way to erode an individual’s normal need for social contact, to effectively starve the brain function of human interaction and comparable to other emotionally unhealthy deprivations. As former Vietnam POW John McCain related “It crushes your spirit more effectively than any other form of mistreatment.”

Rules 3 and 44 of the Nelson Mandela Rules warn of being cut off from the outside world and prohibits more than two weeks of isolation as cruel and inhumane treatment.

*  *  *

While the manufactured COVID 19 health crisis opened the door for the World Economic Forum and its friends to activate One World Government, millions of Americans continue to play the cognitive dissonance game with little awareness they are witnessing a government takeover with increased surveillance and censorship. As coordinated violent protests in Seattle and DC spread a thinly veiled political coup, all accomplished more easily while the American public were in Lockdown.

Today’s Nasdaq price action was likely a bit of a shocker for many freshly-minted day-trading gurus.

After accelerating after the cash trading open to gains of more than 2% from Friday’s close, a combination of the S&P 500 tagging unchanged on the year, Dallas Fed’s Kaplan spoiling the party with comments that suggested the Fed punchbowl may not be there forever, and various COVID headlines (including major rollbacks in California) sent the Nasdaq tumbling to down 2% on the day…

This was only the 26th time that has happened to the Nasdaq (closing down 2% after trading up 2% on the day)…

Source: @MikeMcKerr_TDA

BUT… the Nasdaq 100 rallied more than 2% intraday to set an all-time high, then reversed to close down by more than 1%.

And as @Sentimentrader notes, it’s only done that twice. Today was one…

…March 7, 2000 was the other.

It would seem like an historically notable time for the Nasdaq’s melt-up to slowdown.. if not end…

Trade accordingly.

Who knew that part of Ray Dalio’s “radical transparency” fetish was accusing potential competitors of stealing trade secrets, and when there is no theft, to radically fabricate “evidence” to shut them down?

While it has long been known that in the annals of active management lore, not one hedge fund comes even close to pursuing non-compete clauses and trade secrets lawsuits against its former employees with the same ferocity, tenacity and unbridled glee as the world’s biggest hedge fund Bridgewater (despite valiant attempts by RenTec and Citadel they are at best runners up), what nobody knew until now, is that when Bridgewater was lacking enough legal facts on its side, it would resort to simply fabricating them.

That’s what the world’s biggest hedge fund did on at least one occasion according to a panel of three arbitrators, who according to the FT, found that Bridgewater “manufactured false evidence” in its attempt to prove that former employees had stolen its trade secrets.

According to humiliating – to Ray Dalio – court documents which were made public on Monday, and which quote findings from a panel of three arbitrators, Bridgewater – which manages $138BN in assets, and whose billionaire founder prides in the way “radical transparency” is shoved down all employees’ throats – was found to have “filed its claims in reckless disregard of its own internal records, and in order to support its allegations of access to trade secrets, manufactured false evidence”.

The dramatic discovery emerged as a result of a dispute launched by Bridgewater against former employees, Lawrence Minicone and Zachary Squire, in November 2017, in which the fund claimed the duo had misappropriated trade secrets and breached their contracts. However, Bridgewater’s attempt to bully not only its former employees from launching a new fund, but also the legal system, promptly suffered a spectacular breakdown, when a panel of three arbitrators found that Bridgewater had “failed to identify the alleged trade secrets with specificity”, knowing Minicone and Squire would have to fight an expensive case in order to defend against the allegations, the court filing states.

In other words, even though its former employees – who quit years prior in mid-2013 – did nothing wrong, Bridgewater knew that simply by throwing armies of lawyers after them, it could bankrupt them into submission. And while this strategy has worked over and over, this time it failed.

“The trade secrets as described constituted publicly available information or information generally known to professionals in the industry, and . . . Claimant [Bridgewater], a highly sophisticated entity, knew that the trade secrets as described did not constitute trade secrets,” the tribunal ruled, according to material quoted in the court filing.

There was more. Just to cover its bases, in addition to the trade secrets claim, Bridgewater also accused its two former employees of unfair competition after they co-founded Tekmerion Capital Management, a systematic macro hedge fund with about $60MM in assets under management, which received backing from billionaire Alan Howard and Michael Novogratz.

But here too, Bridgewater hit a brick wall, when the arbitrators found that Bridgewater’s claims had been brought in “bad faith”.

“Claimant’s actions in continuing to press its claims constitute further evidence that its intentions were not to prove misappropriation, but rather, were to adversely affect respondents’ ability to conduct a competitive business,” the arbitrators ruling stated, according to the new court filing.

So how did all of this leak? Simple: Bridgewater was too stingy to pay the falsely accused duo $2 million in lawyer fees, forcing Minicone and Squire to file a court petition against Bridgewater on July 1 to confirm the $2 million in lawyers fees awarded by the arbitration panel in January and, in a move that is set to terminally humiliate and expose Dalio as a consummate hypocrite, to have the full decision by the arbitrators made public.

And while it is hardly news to those in the industry just how despicable Bridgewater’s tactics have been in the past when faced with a potential competition  emerging from its own ranks who may – gasp – steal the fund’s “trading secrets” such as momentum and inverse variance, which incidentally are perfectly public “strategies”, or at least expose to the world just how Bridgewater ended up being a $160BN $138BN hedge fund, what we are far more interested in is whether Bridgewater’s former general counsel was instrumental in creating the strategy used by the fund against its former employees.

We are, of course, talking about one James Comey.

Here are the specifics: Squire joined Bridgewater in 2010 as an investment associate and spent three years at the group working with its research and trading teams before quitting in mid-2013. Minicone, also an investment associate at Bridgewater, joined in 2008 and remained there for almost five years. He too quit in 2013.

What does that have to do with James Comes? Well, before joining the FBI, readers may or may not know that the man who singlehandedly tried to take down the standing US president on what he knew well were false charges, was general counsel of Bridgewater from 2010 to 2013 – the very years that overlapped with Squire and Minicone’s tenure at Bridgewater too.

Yet what is remarkable is that the exact same strategy was pursued against the two former Bridgewater employees as Comey, now in his capacity as disgruntled former FBI chief, would pursue against Trump: fabricating evidence behind a FISA Warrant, and then purposefully leaking select confidential fact and fiction to the NYT, in order to trigger a Special Counsel probe of a sitting US president.

Sadly for Comey, his attempt at a soft coup failed, but the same fundamental strategy was used in both cases. Which is why we wonder: was Comey also the mastermind behind the legal strategy used to pursue all those Bridgewater traders that dared to leave the highly confidential fund and start their own thing.

As for Dalio, who checked out long ago, and is far more excited about his annual pilgirmage to Burning Man…

Just back from Burning Man. Reminds me of Woodstock with better art (installations) and less good music. What a great vibe and what amazing creativity!

Photo is with my pal and coworker Jeff Taylor at his great music camp Root Society. If you go next year, 1-5am is best. pic.twitter.com/ua5UIbRlxo

— Ray Dalio (@RayDalio) September 2, 2019

… in a TED talk Dalio delivered in April 2017, he said the group had created an “ideas meritocracy” by effectively preventing employees from keeping secrets. “We literally tape almost all conversations and let everybody see everything,” he told the audience. Oddly enough, he said nothing about fabricating evidence to make sure any chance of true meritocracy is trampled before it even has a chance to emerge.

As the FT concludes “Bridgewater has said that one in five hires leaves within a year”… in light of the latest news, it must the non-sociopathic hires.

While the mortality rate from COVID-19 is far lower than initially projected, the disease can leave people with a bevy of health problems of unknown duration; from fatigue, to lingering respiratory issues, to loss of taste and smell.

Now, we can add heart damage to the list of common post-COVID complications, according to a new study. 

The long and short of it: Older individuals with pre-existing heart issues, or those with ‘sleeper’ heart conditions which have gone undiagnosed, are at the most risk.

While we’ve known since at least February that coronavirus was suspected of causing – or contributing to – cardiac problems, the extent has been largely unknown. In April, The Harvard Gazette detailed the “multiple ways” COVID-19 may spark cardiac damage;

First, people with preexisting heart disease are at a greater risk for severe cardiovascular and respiratory complications from COVID-19. Similarly, research has shown that infection with the influenza virus poses a more severe threat for people with heart disease than those without cardiac problems. Research also shows that heart attacks can actually be brought on by respiratory infections such as the flu. 

Second, people with previously undiagnosed heart disease may be presenting with previously silent cardiac symptoms unmasked by the viral infection. In people with existing heart-vessel blockages, infection, fever, and inflammation can destabilize previously asymptomatic fatty plaques inside the heart vessels. Fever and inflammation also render the blood more prone to clotting, while also interfering with the body’s ability to dissolve clots — a one-two punch akin to throwing gasoline on smoldering embers. –The Harvard Gazette

Last month the President of Burundi died of a sudden heart attack at the age of 55 after falling ill with coronavirus.

Now, a new study has found that more than half of COVID-19 patients have some type of heart damage, according to Newsweek.

A study involving 1,216 patients – 813 of whom were diagnosed with COVID-19, revealed that 55% had abnormalities when given an echocardiogram between April 3 and 20.

The paper, published in the journal European Heart Journal – Cardiovascular Imaging, had an average participant age of 62, while 70% were male.

Sixty percent of the scans were performed in a critical care setting, such as an ICU unit or emergency room, while the others were carried out in general medicine settings, cardiology, respiratory, or COVID-19 wards. Some 54 percent of the patients had severe COVID-19.

Those with abnormal scans were more likely to be older and have certain underlying heart problems. But after the team excluded patients with existing heart conditions from their analysis, the proportion of abnormal scan results and those with severe cardiac disease was similar. This suggests that the issues were related to COVID-19, they said. –Newsweek

In short, people with cardiovascular disease, or who are at risk of developing it, have a worse prognosis.

If only most advanced nations hadn’t been gorging on fast food for three decades as physical fitness took a backseat, leading to epidemic levels of heart disease.

Authored by Chris Martenson via PeakProsperity.com,

Like a windstorm toppling a hollowed-out tree, SARS-CoV-2 didn’t cause the current recession so much as it exposed how rotten things already were.

Even before SARS-CoV-2, households were struggling. Far too many were limping along without any savings at all, one crisis away from financial ruin.

Debts at every level were at record highs before SARS-CoV-2 came along, and the Federal Reserve was already busy bailing out the US financial system before the virus hit.

The shale oil industry had failed to generate any profits for over a decade before anyone ever heard of Covid19.

The worldwide wealth gap was already record levels before we were forced into lockdown.

What the coronavirus pandemic has done, though, is give the ruling authorities aircover to accelerate all of these trends to warp speed.

Billionaires have been, by far, the largest winners in this story so far.  Ditto for mega corporations.  Main Street and small and medium-sized businesses have been utterly crushed.

Where the Great Financial Crisis in 2008 could have been — and should have been — a wake-up call to operate the system more equitably and sustainably, it was used instead as an excuse to make things even worse.

No bank executives were charged or even went to jail for any crimes they played in bringing the financial system to the brink of disaster.  Accounting deceit, wire fraud, and forgery — anybody remember ‘robosigning’?  That was forgery, a felony, and not one charge was ever leveled.  Instead, the Too Big To Fail banks were bailed out and got bigger at the expense of smaller, more responsible firms.

My point here is that SARS-CoV-2 has laid bare our true value systems.  Some countries have done an admirable job of showing they care about their citizens, making public safety and health their top priority.  Other countries, such as mine (the US), have demonstrated the opposite.

When it comes to making judgment, I look at actions much more than words. What have been the actions of the US authorities so far?

1. The Federal Reserve swooped in to assure that the wealthy got even wealthier.

2. The CDC couldn’t get effective test kits prepared or deployed until months after many other countries did.

3. $Billions and $billions were smoothly and rapidly delivered to the largest institutions, corporations and wealthiest households.

4. But only a single $1200 stimulus check has been sent to the poorest of American families.  Well, most of them, but many are still waiting for their stimulus checks.  Every household sandwiched between the rich and the poor has received nothing.

In other words, the Fed has made its #1 priority the preservation of the financial advantages of the already-rich, while the federal government has made clear that public health isn’t really a priority at all.

The unfairness and legal and moral wrongness of this next bit of news stunned even long-time skeptics like myself:

(Source)

I object strenuously to any taxpayer money, my money, being sent to any and all religious organizations (I’m a big believer in the separation of church and state).  But to do so to help the Catholic church cover shortfalls due to payouts to victims of institutionalized pedophilia?  Really, that’s just…I’m out of words.

But more often than not, that’s the business the federal government is in: protecting the abusers, not the victims.

Thousands of hedge funds and other extremely wealthy financial firms are similarly feeding from the same trough of substantial taxpayer payouts.

But where real support is needed? The free money river has never been more than a trickle. Testing for SARS-CoV-2 has been throttled back due to lack of funding. Hospitals remain chronically short of critical PPE. 30% of all US households were unable to make last month’s mortgage payment.

As I said, these dots simply reveal the values and priorities of those running the show.  If I were to use a single word to sum things up, it would be: greed.

Anything and everything that funnels money from the many into the pockets of the few is being done and done swiftly.  Anything monies directed to the well-being of the masses is being done slowly, grudgingly, and sparingly (if at all).  “Never let a good crisis go to waste” is the motto of current crowd in charge.

I am asked all the time to decide between Covid-19 being real or this whole thing being a scam.  To which I reply, “why not both?”

The Elites Have Won

The elites have all the power and they have no interest in sharing any of it.  They are too blinded by greed and driven by fear to do otherwise.

In this way, they pretty much have won.

They’ll print up however much money they desire and hand it out to themselves — after, of course, laundering it through the ““markets”” to create the appearance that fairness was actually involved.

But we all know it’s not. The data is crystal clear: Wall Street’s mighty siphons assure that nearly all of the Fed’s freshly printed money goes straight into the pockets of the most well-connected players.

As I’ve taken pains to point out, given all the public’s focus on Black Lives Matter, somehow the Federal Reserve has escaped being called out for being a nearly pure-white organization whose efforts overwhelmingly funnel additional funds to white households.  Whether by design or accident, the Federal Reserve’s actions do more to cement racial inequality than any other entity, group, or organization in existence.  By far.

Looked at another way, Trump is soothed by the stock market hitting new all-time highs and I believe this has blunted the seriousness with which he takes SARS-CoV-2.  In jamming the stock markets higher, I see the Federal Reserve as also partly responsible for the lame US response to Covid, which has already cost far too many people their lives and many more people their health.

Of course, intervening in the financial markers to push them higher during an election year is a profoundly political act. Something the Fed has absolutely no business doing.

Put all that together and the Federal Reserve is a partisan, political organization that is costing people their lives and health while promoting racial inequality.

Yet it’s given a nearly free pass on all of that from the mainstream press, our supposed watchdog for truth.  Hardly is Fed Chair Jerome Powell ever asked a single daunting question along these lines.

Our health organizations like the CDC and the WHO are similarly compromised and complicit, too shot through with political intrigue and pharma money to be of any help.

All of which is both shameful and self-injurious, because if we’d like to avoid a very dark future filled with societal unraveling, then the Fed’s dangerous actions need to be brought to heel. And soon.

However, after all that has transpired, I don’t see much hope of the Fed changing its ways.  It has proven it can’t be goaded or shamed into introspection or altering course.

Conclusion

All of which is my way of saying that I am bracing for impact.

I simply don’t know what else to do.  We are on our own.

It’s time to consider how you will provide your family with the basics, the very bottom layers of Maslow’s Hierarchy of Needs — water, food, shelter, resources, health & safety — if the systems we depend on today start weakening:

When people are busy moving down the Hierarchy of Needs, that means society is crumbling.

And folks are already indeed moving. Literally. Real estate for sale in Manhattan is piling up without takers, while more rural properties are being snapped up.  Gardens are being planted and guns are being bought.

SARS-CoV-2 has taught many lessons and revealed much.  To me, it’s revealed that the elites as led by the Federal Reserve won’t deviate from accelerating inequity until being forced to stop.  Whether that will occur via social revolution, the destruction of the purchasing power of the US dollar, or something else, I don’t know.

But I do know that whatever it is, it won’t be the cause of all the misery that will follow.  The true culprits are the current and former managers (not leaders) with the Fed and within the DC beltway who failed to protect the vulnerable, set reasonable policies, and conduct themselves with integrity.

So my advice is to brace for impact.  There’s nothing any of us can do to affect national monetary policy or stop the major unraveling trends already set in motion, but we can do our best to step outside harm’s way and tend the welfare of ourselves and those we care about as the system falters.

In Part 2: Brace For Impact! I share the key indicators that have me most concerned about the nearness of the next systemic shock, as well as the key steps I recommend you take now using whatever time remains available to you.

We are facing unprecedented challenges that are accelerating at a faster rate than at any other time in human history. Every day we have left to prepare prudently is a gift. Use the time wisely.

Click here to read Part 2 of this report (free executive summary, enrollment required for full access).

If anyone still needs a simple yet infallible thesis to buy gold, here it is from Deutsche Bank’s chief credit strategist Jim Reid.

Fed Balance Sheet – One-way traffic again

Last week the Fed balance sheet dipped below $7tn and is now -3.5% below its peak a month ago. However, this reflects emergency pandemic liquidity facilities rolling off rather than anything more structural. DB’s Steven Zeng now thinks it will start to climb again with QE and various other loan facilities to around $8.3tn by year end, double where it was at the start of 2020.

Some believe this is already a huge amount, but as the second graph shows, the Fed’s balance sheet as a % of GDP is notably lower than the ECB and BoJ’s. If they were aligned, the Fed balance sheet would now be around $11tn and $25tn, respectively.

With DB’s Matt Luzzetti expecting that US debt to GDP will be above 100% in 2020 and near 140% by 2030 from just shy of 80% at the start of this year, it seems inconceivable to me that the Fed and other central bank balance sheets will do anything other than explode over the next decade and perhaps beyond.

Authored by Chris Hamilton via Econimica blog,

I’m not an economist nor a Wall Street analyst.  I get paid nothing to write this, have nothing to sell, make no buy recommendations, and leave it up to the reader to determine what it all means.  Today, just some comparisons of the Japanese and American demographic driven zero interest rate policy kickoffs, resulting in debt explosions, ongoing collapses in births, and declining energy consumption…yet (thus far) resulting in divergent asset depreciation/appreciation.

  Also of note should be that regardless the crisis (Lost decade(s), Fukushima, 9/11, GFC, Coronavirus) the answer has been the same; cheaper debt to incentivize more debt and call it “growth” (without a concern how it would ever be repaid).

For Japan, 1991 was the conclusion of the last bit of demographic driven demand growth.  Since then, interest rates have been pushed to zero to incent an ever decreasing quantity of consumers to consume more…with little positive impact.  Instead, the Japanese government has decided to do what Japanese consumers couldn’t…grow spending via blowing out official government debt to GDP.  Interestingly for all the government market intervention, equity prices are still down over 40% from peak valuations.

For the US, the last bit of demographic driven momentum concluded in 2018 but the US went to ZIRP a decade earlier in the demographic cycle (’09) than Japan.  Now the US government has decided even the best efforts of US consumers to consume beyond their means isn’t adequate…and thus official government debt to GDP is soaring (and of course, this doesn’t take into account the 2x to 4x larger unfunded liabilities that did not exist prior to 1950).  Like Japan, the US federal government and Federal Reserve have taken an ever increasingly “interventionist role”, to great effect for asset valuations.  One note on the estimated return to working age population growth in the chart below…it is entirely dependent on the unlikely return to high rates of immigration.

Annual Change Working Age/Elderly, Discount Interest Rate, Debt/GDP, Equities

To read the charts, five variables – annual change in 20 to 60 year old populations (green columns), annual change in 60+ year old populations (grey columns), discount interest rates (black dashed lines), Nikkei 225/Wilshire 5000 (yellow lines), and debt to GDP ratios (red line).

JAPAN

US

BTW – In retrospect, the talking heads and market gurus agree the market peaks of 2000 and 2007 were “bubbles”, but these same folks are now suggesting “this time is different”!?!

Childbearing, Post-Childbearing, & Births

JAPAN

Below, no anecdotes or happy stories, just demographic facts that drive the real world…annual births plus UN estimated births through 2040 (grey columns), likely births (black dashed line), childbearing females (yellow line), post childbearing females (red line).  Japan (and its domestic consumption) will only continue shrinking and likely at an accelerating rate!?!

US

Annual births plus Census/UN estimated births (grey columns), actual births since ’00 and likely births (black dashed line), childbearing females (yellow line), post childbearing females (red line).  BTW – US female childbearing population is inclusive of anticipated immigration, but actual immigration in 2019/2020 is running far below estimates…and may essentially be zero for 2020.  Beyond that, who knows, but continued lower immigration means significantly fewer females of childbearing age and subsequently significantly fewer births…and significantly smaller present and future consumption (GDP).

Demographics & Energy Consumption

To round out the picture, I show the correlation of demographics in energy consumption.  Charts below are total primary energy consumption (oil, coal, renewable, nat. gas, etc) blue line, year over year change in energy consumption (red columns), year over year change in 20 to 60 year old population (green columns), and the central bank set discount interest rate (black dashed line).  Consumption data is from EIA through 2017 and then my estimates through 2040 following existing demographic reality.  After decades (centuries) of energy consumption growth, both Japan and the US continue falling for over a decade now…mirroring their domestic demographic and import/export realities.

JAPAN

US

Make of this data what you will and invest accordingly.

The rise of mobile daytraders has been a global phenomenon during the pandemic. From the US to Europe to China to India, pajama traders swinging stock and options positions from their smartphones steadily increased as global central banks printed trillions of dollars and ignited a historic rally in world stocks. 

Central bank balance sheets expanded rapidly as pandemic began. 

World stocks drop on the pandemic, but V-shaped recovered as central banks unleashed trillions of dollar into global markets. It was the run-up when retail decided to download mobile apps for trading and join the stock market party. 

More recently, daytraders in China have seen a chaotic melt-up catapult the tech-heavy ChiNext index 40% in the last 30 trading sessions. 

US daytraders using the Robinhood mobile app bored during virus lockdowns with no sports and confined to their homes, panic bought shares of bankrupted companies, outpaced hedge funds in returns over the last several months.   

The rise of daytraders using smartphones has also become popular in India. Mobile trading recently overtook internet-based trading in cash markets. 

Nitin Kamath, founder, and CEO of Zerodha, told BloombergQuint, inexpensive smartphones have made mobile trading more accessible to the masses who don’t have access to a desktop computer or traditional stockbroker. 

Official data via the National Stock Exchange of India shows mobile trading turnover in cash markets increased 9-percentage-points to 23% since February, compared against the 4-percentage-point rise to 13% for internet trading during the period. 

As of June, the mobile share of trading on the National Stock Exchange was about a quarter of all traders. 

Upstox, an Indian discount brokerage firm operated by RKSV Securities India Pvt., which has a mobile app for trading – has seen a rapid increase in users this year: 

“Over the last year, Upstox has on-boarded a large number of digitally savvy traders from non-metro cities,” Ravi Kumar, co-founder, said in a statement. “Over 80% of the total customer base acquired by the company is from tier-2 and tier-3 cities like Nashik, Jaipur, Guntur, Patna, Kannur, Tiruvallur & Nainital and among others. Currently, almost 75% of the total customer base is below the age of 35.” 

BloombergQuint notes, “as more investors flock to equity markets, shares of listed brokerages surged in the last three months. ICICI Securities, IIFL Securities Ltd., 5paisa Capital Ltd. and Motilal Oswal Financial Services Ltd. jumped 33-101% during the period.” 

NIFTY’s rising wedge broke – can’t get too excited about this pattern’s downside break. 

Retail is going all-in into equity markets during a global pandemic, worldwide recession, and central banks juicing stock markets with trillions of dollars will ultimately end in tears.

We’ve already outlined Robinhood traders blowing up their accounts by taking out too much leverage. 

• Robinhood Trader’s Suicide Is Warning For Millennial Investors
• ‪”Almost $1 Million Disappeared”: A Robinhood Horror Story

And how will this all end for inexperienced daytraders using mobile apps to panic buy stocks across the world at record high valuations? Well, Leon Cooperman recently said it ‘won’t end well’.