Category: zerohedge

Senior editor, Ash Bennington, joins Tyler Neville to discuss secular stagnation and the financial chicanery happening in markets. With stocks rising above global GDP, Ash and Tyler consider how the increase in bond issuance has been electric all while yields aren’t rising. Tyler also argues how people look at markets through a political lens, but not a demographic lens, and how demographics can further shape an investor’s understanding of what’s occurring. They also talk about the DXY in juxtaposition with the federal deficit, the relationship between spot gold and gold miners, and what the future holds for pension funds.

The virus pandemic triggered a socio-economic bomb across major US metro areas resulting in one of the largest panic hoardings of guns and ammo by fearful consumers in quite some time, if not ever.

Gregory Ionadi, 75, the owner of gun shop Smoke N’ Guns, located in Oakmont, Pennsylvania, told PJ Media: 

“Prior to the COVID outbreak, President Obama was the best gun salesman we ever had,” said Ionadi. “Anytime he was going to ban this, ban that, there was a rush on gun sales. When President Trump was elected, the fear of a gun ban subsided, and sales were so flat that several gun manufacturers went out of business.”

Ionadi said sales at his gun shop erupted during the pandemic. He said he made more gun and ammo sales from March to April than what was done in the last three years, calling the period absolutely “crazy.”

He said once the social unrest spread across the country by late May into early summer, the second round of panic buying occurred. 

“You wouldn’t believe the first-time gun buyers I’ve seen,” said Ionadi. “I started seeing little old ladies — 70, 80 years old — wanting to defend themselves because of what was going on. So, I had to change my thinking. I had to start buying .22 Magnum revolvers. I have some revolvers here, but I had to start buying revolvers that women and older folks could use because they are easy to handle. Semi-auto and a revolver are two different things.” 

Gun stocks soared this summer as gun background checks rose 79% in July year-over-year. 

The FBI ran over 3.6 million background checks through the National Instant Criminal Background Check System (NICS) last month – the third-highest on record, behind 3.9 million checks in June, and 3.7 million checks in March.

Surging gun sales also means increasing ammo sales. For the second time this year, first reported in March/April, ammo shortages are developing. 

Stories about “ammo shortages” have appeared on local and national media outlets in the last week. 

Brownells, Inc. co-chairman Pete Brownell, recently told FOX Business’ Varney & Co that a supply shortage in ammunition is now unfolding. 

Brownell said the firearm industry recorded a 90% increase in gun sales since mid-March, with much of the sales seen in metro areas. He said ammo sales have risen by at least 30%. 

“We could receive truckloads of nine-millimeter [and] we can sell it in hours where it used to take weeks – weeks to a month,” he said.

Brownell said the surge in weapon buying might not stop until 2H21.

Google search trend “ammo shortage” is rising for the second time this year.

There appears to be a nationwide shortage of 9MM ammo. 

Ammunition Depot: Sold out of 9MM

Ammo.com: Sold out of 9MM 

Target Sports USA: Sold out of 9MM

Ammo For Sale: Sold out of 9MM 

Good luck finding 9MM ammo. 

Only a few hours after Mitch McConnell kicked the legs out from under the market by announcing that stimulus talks had reached a “stalemate”, President Trump will brief the press again, in what looks to be a hopefully less-eventful rerun of last night’s presser.

Authored by Paul Joseph Watson via Summit News,

In another illustration of how many Americans are concerned about Joe Biden’s advancing age and declining mental faculties, a new Rasmussen poll has found that 59 per cent of likely voters don’t believe he’ll finish a 4 year term in the White House.

Broken down along party lines, 74 per cent of Republicans believe Biden won’t make it through his first term while 49 per cent of Democrats agree.

Just 14% of voters think it’s “not at all likely” that Biden’s running mate will become president before his first term ends.

Questions about Biden’s age and his alleged cognitive decline have dogged his campaign for months.

During an interview last week, Biden once again stumbled over his words while trying to assert that he didn’t need to be mentally tested.

Polls show that 38 per cent of American voters think Biden has “some form of dementia,” including one in five Democrats. 61 per cent of voters also think Biden should address the dementia issue publicly.

If the majority opinion holds true and Biden wins the election, that means his running mate, the just announced Kamala Harris, is virtually guaranteed to become president before 2024.

Additionally,  Jim Rickards’ expectation now is that Biden won’t even make it to The White house and will soon be replaced as the nominee soon.

Democratic insiders will probably force him out of the race in the next week or so.

They don’t want to risk exposing him to the American people before the election. For Democrats, the stakes are simply too high.

One public incident or serious slip-up is all it could take to kill his chances in the election. The American people simply aren’t going to elect someone who they feel is mentally unfit for office.

Many voters obviously dislike Trump. But, no one could credibly argue that he’s suffering from cognitive decline.

So what’s going to happen?

The Democrat power brokers (Tom Perez, Donna Brazile, Valerie Jarrett, Philippe Reins, AOC, John Podesta and a few others) will get in a room and pick a new nominee.

Biden will “release” his delegates, and party leadership will direct the super-delegates to support that choice. This will start a stampede among the former Biden delegates.

The Bernie Sanders delegates will already be onboard because they’ll be part of the consultation. Then the new nominee will pick a VP and  the “convention” will tidy things up. The race will continue from there.

Alternatively, the power brokers could allow Biden to get the nomination and then remove him as nominee before the debates. That’s even easier because there are no delegates involved. It’s just an executive committee decision the candidate cannot refuse.

Still, the process will be a shock to millions of Americans who’ve been expecting a Biden candidacy.

How much of a surprise would that really be?

On a day that saw a rotation back into value stocks pre-empt a broad-based market selloff as investors, and weeks after Apple announced a split of its own, Tesla has just announced a 5-1 stock split.

The news sent shares of the electric vehicle maker up 6% in post-market trade. Though it’s shares are still trading well above $1,000 apiece, the car company took a shellacking on Tuesday, falling 3.1% before the close.

“Each stockholder of record on August 21, 2020 will receive a dividend of four additional shares of common stock for each then-held share, to be distributed after close of trading on August 28, 2020. Trading will begin on a stock split-adjusted basis on August 31, 2020,” the company said in a corporate filing.

Though the split will make Tesla shares more “affordable”, Charles Schwab and other online brokerages are already offering fractions of shares held on their balance sheets for as little as $5.

So, why is Tesla going ahead with the stock split if retail investors are clearly having no trouble accessing the company’s shares? 

We’ll let you take a guess.

Looks like the stock needs a boost: #Tesla declared 5-1 stock split in form of stock dividend to make stock ownership more accessible to Robinhooders. Each stockholder of record on Aug21 will receive dividend of 4 additional shares. Trading will begin on split-adj basis on Aug31. pic.twitter.com/qe7690lFlu

— Holger Zschaepitz (@Schuldensuehner) August 11, 2020

Just days after President Trump’s four Executive Orders providing relief to Americans – and snubbing demands by Democrats and Governors for state bailouts – some might suggest The Fed just stepped up to the plate to ‘help out’.

Perhaps the rates were just too high for states to want to partake? Or are they all expecting a direct handout, rather than a Fed-sponsored loan?

Fed Statement:

The Federal Reserve Board on Tuesday announced revised pricing for its Municipal Liquidity Facility (MLF).

The revised pricing reduces the interest rate spread on tax-exempt notes for each credit rating category by 50 basis points and reduces the amount by which the interest rate for taxable notes is adjusted relative to tax-exempt notes.

Today’s changes will ensure the MLF continues to provide an effective backstop to assist U.S. states and local governments as they weather the pandemic.

The MLF was established under Section 13(3) of the Federal Reserve Act, with approval of the Treasury Secretary.

It offers up to $500 billion in lending to states and municipalities to help manage cash flow stresses caused by the coronavirus pandemic.

Read the full term sheet here.

 

Sturgis meet coronavirus shutdowns: the world’s largest annual motorcycle rally in Sturgis, South Dakota has been source of immense controversy this year after health officials warned it could be a ‘super-spreader event’. 

Running from Aug. 7 to 16, it’s expected to be the single largest gathering that’s taken place since national virus-related shutdowns took effect earlier this year. Some 250,000 bikers are expected to descend on the town, which is still a much smaller number than recent years. 2015, for example, witnessed a record more than 700,000 people.

With a reputation for attracting ‘outlaw’ biker types and gangs, the Sturgis rally goes back to 1938, but this year some angry locals have argued before the town council “it’s a huge, foolish mistake” given current pandemic fears.

But the rally is already off to a wild start even with what’s expected to be a smaller than average crowd, as CBS reports:

“The Department of Public Safety reported that police made 84 arrests for driving under the influence or drug-related offenses during a 24-hour period spanning from Saturday into Sunday morning. That’s up from last year, when 76 people had been arrested in a similar time frame.“

Police have also reported at least 18 crashes so far. It comes on the very week the US passed another grim milestone, surpassing five million confirmed COVID-19 cases, and as South Dakota may be witnessing a resurgence in cases similar to other states.

Regardless, as one person interviewed told CBS: “People are tired of being at home, you know. This is what this rally started about is freedom.”

As expected, there’s not much concern for social distancing either:

Attendees in Sturgis are being encouraged, but not required, to wear masks. Few appeared to be doing so.

So far, as the town’s Main Street fills with bikes and bars fill with bikers, there is scant evidence of social distancing. Visitors to this 80th edition of the cycle rally already greatly outnumber the 6,000 residents of Sturgis, wedged into the South Dakota hills.

A massive motorcycle rally drew thousands of maskless riders to the streets and bars of Sturgis, South Dakota, despite the rise in coronavirus cases throughout the U.S. https://t.co/vRTRM5wrV1 pic.twitter.com/lqSVvjuP3Z

— CBS News (@CBSNews) August 10, 2020

While the majority of city residents, based on polls, are said to be against holding the rally this year, the city council approved by firm majority to move forward, given especially the event has generated some $800 million in total revenue in recent years, based on the state’s Department of Tourism figures.

Authored by Simon Black via SovereignMan.com,

Recently I held a live Q&A Zoom call with my friend Peter Schiff, and several dozen members of our Total Access group.

And towards the end of the call, one of our members asked– what do you think the future looks like for the US, and the West in general?

Peter went off into one of his classic tirades about how the US dollar is doomed because of how much money the central bank is printing.

And while I generally share Peter’s dim view about the dollar (were it not for all the other world currencies that are being printed into oblivion), my answer was a bit different.

In deference to the 20th century Danish Proverb– “predictions are hard, especially about the future”– I do think it’s possible to look at major trends to at least have a sense of direction.

So if you want to understand where things are going, just take a look at everyone’s priorities.

Most governments’ Covid reponses are an obvious example.

The economic destruction they’ve created is staggering. Tens of millions of people unemployed, countless businesses gone bust, trillions of dollars of wealth wiped out.

In the first wave back in March, they shut down the economy to protect us from the virus. Then they opened up again… but– shocker– the virus was still there.

What a surprise! Shutting down the economy did not eradicate a virus.

So what did a lot of these people do when the second wave hit? They started shutting down the economy again.

It didn’t work the first time, so let’s keep trying the same approach and expect a different result. It’s genius!

This is clearly economically destructive. But again, economic prosperity is no longer the priority. All that matters is force-feeding people a false sense of safety.

Governor Andrew Cuomo of New York probably captured this mentality the best when he said back in May,

“We don’t want to lose any lives [to reopen the economy]. We’ll figure out the dollars, and we’ll figure out the economic impact, but we’ll protect people in the meantime, and we’ll protect their health.”

This is total BS. The sad reality is that lives are lost all the time in the normal course of economic activity.

In New York City, two workers died during the construction of Freedom Tower. Plus there were dozens of life-altering injuries, like spinal fractures and paralysis.

The government knew the tower’s construction would likely cost human lives. But they approved the construction permit regardless, because they knew the benefit would outweigh the human cost.

Similarly, over 100 people died constructing the Hoover Dam in the early 1930s. The government knew that people would die. But the benefit outweighed the cost.

Today there can be no discussion of cost or benefit. There is one priority, and it’s no longer economic prosperity.

But the shift in priorities doesn’t stop there.

Basic fiscal responsibility is no longer a priority– and it hasn’t been for a long time.

Most western governments were racking up enormous debts even before Covid started.

In the US, even during the economic boom of 2015-2018, the federal government added at least $1 trillion to the debt each year.

Now the debt growth is completely insane: the US Treasury Department expects to add $5-$6 trillion to the debt this calendar year.

(That’s more than the entire national debt as recently as 2001!)

And not to be outdone, the Federal Reserve has conjured trillions of dollars out of thin air since the start of Covid and slashed interest rates, once again, to zero.

Plus, there’s a good possibility they’ll make interest rates negative. Just imagine how much prosperity you’ll achieve once you have to start paying your bank just to save money.

Of course, all of these tactics– printing money, going deeper into debt, negative interest rates, paying people $600/week to stay home and NOT work– are destructive to economic prosperity.

Then we have the rise of the Bolsheviks… a growing chorus of politicians (and voters) who despise capitalism.

Like Seattle city councilwoman Kshama Sawant, who claimed she wants to overthrow “the racist, sexist, violent, utterly bankrupt system of capitalism” and replace it with “a socialist world.”

A few years ago this was a fringe view. Now it’s mainstream fever.

They want to get rid of capitalism– the system that created the most prosperous nation in the history of the world– and replace it with the same economic model as Cuba and the Soviet Union.

And Joe Biden, of course, unveiled his economic plan last month, built around ending “the era of shareholder capitalism.”

He wants the government (and Twitter mob) to set the priorities and stakeholders in your business, rather than the market.

This, again, is an obvious reflection of priorities. And economic prosperity is clearly not on the list.

Economic prosperity also takes a backseat to social justice.

Yes, most reasonable people probably agree that the mistreatment of minority groups should change. But that’s not an excuse to go on a violent rampage.

Yet whenever angry mobs take to the streets and destroy private property, the media elite and their political allies justify criminality as necessary to end systemic racism.

Meanwhile, universities have turned into hotbeds of progressive radicalism to perpetuate white fragility and the evils of capitalism.

Corporate America has also caved. You can’t even sell beans anymore without things turning political.

Countless people who are talented, productive, and made valuable contributions to their companies have been fired because they used the wrong words or expressed some intellectual dissent from the Twitter mob.

Firing a rock-star employee because of his/her personal (and non-controversial) views would ordinarily be considered completely stupid. But now it’s the norm… because economic prosperity is no longer the priority.

This trend is obvious: several powerful movements have gripped the world… and most of them are economically destructive.

So it’s not terribly difficult to see where things are headed.

*  *  *

We think gold could DOUBLE and silver could increase by up to 5 TIMES in the next few years. That’s why we published a new, 50-page long Ultimate Guide on Gold & Silver that you can download here.

Despite an early bounce on vaccine headlines, WTI reversed lower (again) at a key technical level (200DMA)…

“We still continue to have an overhang and a significant amount of spare capacity within OPEC,” said Bart Melek, head of global commodity strategy at TD Securities.

“It’s going to be tough to get out of that trading range.”

Additionally, as Bloomberg reports, OPEC and its allies will ease their historic output curbs this month in a test for a market already devastated by the pandemic; and finally, on the ‘bearish side, U.S. crude oil production in 2021 is forecast at 11.14m b/d, compared with 11.01m b/d projected in July, EIA says in monthly Short-Term Energy Outlook.

For now, inventories are all that matters for the algos…

API

• Crude -4.40mm (-3.2mm exp)

• Cushing +1.073mm

• Gasoline -1.31mm (-1.50mm exp)

• Distillates -2.949mm (-100k exp)

Expectations were for a 3rd week of crude inventory draws and API reported a larger than expected drop of 4.4mm barrels (vs 3.2mm exp)…

Source: Bloomberg

WTI hovered around $41.50 ahead of the API print and lifted very modestly on the data…

“Oil could not ignore the big correction in precious metals,” said Phil Flynn, senior market analyst at The Price Futures Group. The sharp selloff in gold and silver Tuesday “led to some trickle over margin selling on oil,” he told MarketWatch.

 

 

Authored by Michael Snyder via TheMostImportantNews.com,

In 2020, it seems like each new day brings more headlines about chaos on the streets of America, and on Monday that included violence right outside the gates of the White House.  It is being reported that there was “an active shooter near the White House”, and we are being told that the Secret Service shot a “male suspect” and that the “male suspect” had been transported to the hospital.  I am sure that we will learn more about this incident in the days ahead, and we should be thankful that the Secret Service was able to easily handle this situation. 

But there are reports that a group of protesters plans to “lay siege” to the White House in the weeks leading up to the election, and so officials will undoubtedly have their hands full as we draw closer to November.

Meanwhile, we just witnessed five hours of rioting, looting and violence in Chicago.  Some rioters exchanged gunfire with police, and ultimately a decision was made to raise bridges going into the city in order to contain the violence…

Chicago officials raised bridges and suspended some train and bus service Monday morning after unrest and looting caused widespread damage in the city’s downtown overnight.

Videos that were circulating on social media captured the early morning scenes of hundreds of people in the streets, dozens of police officers, looting and confrontations with the police. There was also an exchange of gunfire with the police in the downtown, according to a police spokesman, Tom Ahren. He said on Twitter early Monday that there were “shots fired at police who returned fire,” and that no officers were injured.”

In the past, a night of chaos like that would have been the top headline in the country for days, but now it is “just another riot” which will soon fade from memory.

These days, it takes quite a bit to shock us, and what happened at a “Back the Blue” rally in Fort Collins, Colorado on Saturday did shock many of us.  A group of leftists decided to confront the protesters that were supporting the police, and that confrontation ultimately degenerated into a full-out brawl…

Video shot during the event captured the moment tensions between the two groups boiled over as a group of men who apparently attended the rally approached a group of counter-protests dressed in black.

As the two groups approached a ditch, a fight broke out among the groups with people scuffling on the ground, punching each other, and spewing obscenities.

A lot of people celebrated that brawl, but the truth is that it should make us all very sad.

Americans shouldn’t be fighting Americans.

Is this what the future holds for our nation?  A house divided against itself will surely fall, and right now the U.S. is very, very deeply divided.

Every single night there is more violence, and the entire world is watching.  In Portland, rioting has been a nightly occurrence for two and a half months straight, and President Trump wants the National Guard to be called out…

Portland, which is out of control, should finally, after almost 3 months, bring in the National Guard. The Mayor and Governor are putting people’s lives at risk. They will be held responsible. The Guard is ready to act immediately. The Courthouse is secured by Homeland!

Ultimately it will be up to the governor of Oregon whether the National Guard is deployed or not, and it appears to be doubtful that it will happen any time soon.

Further north, law and order desperately needs to be restored in Seattle as well, because rioters continue to turn the downtown area into a war zone…

Riots broke out in Seattle on Sunday evening ahead of an expected city council vote to defund the police, according to videos on social media.

Video by @BGOnTheScene showed Antifa protesters attacking an Amazon store. Journalist Andy Ngo, who tweeted the video, said the protesters had been using sledgehammers and have been rioting for hours, smashing businesses in and around Capitol Hill.

I didn’t think that we would still be seeing this much violence here in August, and now that we are getting close to the election there is a strong possibility that a new wave of chaos could erupt in cities all over America at any time.

Of course if President Trump wins in November of if the outcome is very closely contested, that will only add fuel to the fire.

For years I had been warning that anger and frustration were building to exceedingly dangerous levels in this country, and now we are reaping what the mainstream media and many of our political leaders have sown.

Sadly, what we have experienced so far is just the tip of the iceberg, because much worse civil unrest is still on the horizon.

So it makes sense why so many people are wanting to move away from the big cities at this point.

The other day I wrote an article about the hundreds of thousands of wealthy New Yorkers that have already fled NYC, and now we are being told that moving companies “remain inundated with requests from people leaving New York City”…

Even as the number of confirmed coronavirus cases has leveled off in recent weeks, moving companies say they remain inundated with requests from people leaving New York City.

Big Apple-based moving company Oz Moving, for example, told FOX Business that the volume of moves continues to rise at a “substantial rate” – in addition to a “drastic” spike in storage compared with years prior.

On the west coast, Joe Rogan says that there is “a mass exodus” out of the state of California, and he recently decided to flee the state himself.

Of course all of this movement is rapidly driving up property values in desirable rural communities all over the nation, and this is going to make it more difficult for those with more limited financial resources to relocate.

If you are among those that are considering fleeing the major cities, I would encourage you to make your decision quickly.  Things are only going to get crazier in the months ahead, and the longer you wait the more difficult relocating will become.