On this year’s Leap Day, Peter analyzed another round of inflation data and the economic factors at play in the quickly approaching 2024 general election. Bitcoin also surged back above $60,000 after the SEC approved bitcoin ETFs. Inflation came in worse than expected for personal consumption, and gold finished the week at nearly $2090/oz.
Peter thinks Bitcoin’s revival this week is the last gasp of breath before the asset blows up completely:
“These ETFs are really the tail that is wagging the Bitcoin dog. I think it’s all now about the ETFs, and of course, Bitcoin lives by the ETFs, it’s going to die by the ETFs and [it’s] probably not going to be a very long life.”
Investors eagerly buying into these ETFs may have a tough time moving back into gold if the yellow metal continues to climb in price:
“It’s going to be like a…roach motel. The money checks in. It doesn’t check out. It goes to money heaven because it’s one thing to put money into a Bitcoin ETF. It’s going to be a whole other thing to get it back out.”
With new home sales and durable goods orders declining faster than expected, Peter explains the bizarre state of the housing market:
“[Housing] prices are still up, even though the interest rates are up. It’s an unprecedented situation that makes housing extremely unaffordable and means that more people are stuck renting, no matter how high the rent goes.”
All of these factors weigh on voters’ minds at the ballot box, and so far, Biden has received most of the blame:
“This also confirms what I’m saying, and what the voters are saying: the economy is lousy. The reason that Biden is not getting credit is because he’s getting the blame. …Whether it’s Biden’s fault or not, the voters know the economy is lousy. They can’t afford to eat, and they’re working two or three jobs. And they’re blaming Biden, and they’re hoping that maybe things will be different under Trump.”
“Donald Trump is a better bet to win than Biden. So the markets say that Trump has a better chance of becoming the next president than Biden. But the betting markets also say that it’s more likely that a Democrat wins the White House than a Republican. So what are the markets betting? The markets are actually betting that Biden doesn’t run and that somebody else takes his place. Because the only way Trump is going to lose is if he’s not running against Biden.”
The only promising figures released this week were on personal income and spending, although Peter argues they’re hardly worth celebrating:
“Now normally, hey, that’s good news, right? People are earning more money. But they didn’t really earn more money. They received more money from government transfers. The big source of that 1 percent gain was government transfer payments. Mainly social security. … So some people on social security got a bigger check.”
Because this income was created by the government, it’ll likely make inflation worse:
“I don’t think that people on social security are going to save that money for long. They’re going to spend it. It’s just taking them a little longer to get to the store. So this is not good news. … This new spending power came into existence, not through effort and work, which would be productive and help to increase the supply of goods. It’s just people collecting money that the government created out of thin air. So it’s inflation.”
With gold stocks down this week and gold holding steady above $2000, now is a great time to buy the dip in gold stocks before the economy gets even worse:
“So we’ve got weak economic data, strong inflation data. We’ve got a bubble in the stock market. We’ve got a bubble in crypto. We’ve got a great opportunity to fade that trade, to bet against that bubble. All bubbles ultimately pop. It’s just a question of when and what’s the pin.”
The coming months will be crucial for the economy. As inflation continues to hang on and important indicators keep falling, precious metals stand out as a great defense against a weakening dollar and asset bubbles in the broader economy.
US Includes Nuclear-Capable Assets In Large Military Drills Aimed At North Korea
It’s very likely that the government Kim Jong Un will soon ramp up its provocative missile tests once again, given that the US and South Korean militaries have just kicked off their spring drills.
The ‘Freedom Shield’ exercises began Monday and are scheduled to run through March 14. Importantly, these are the first annual joint Freedom Shield drills since Pyongyang pulled out of a 2018 inter-Korean military pact in November, meaning much more unpredictability and a greater chance of a direct North Korean ‘response’ (likely in the form of a launch, or its own provocative drills).
Reuters has cited South Korea’s Joint Chiefs of Staff (JCS) to say “Freedom Shield will involve twice the number of troops from both sides compared with last year in 48 rounds of combined field training, including air assault and air strikes.”
What’s more is that the US-South Korea exercises are focused on preparing for a scenario where Pyongyang’s nuclear arsenal would have to be hit and neutralized, including “identifying and striking” cruise missiles.
American strategic assets such as an aircraft carrier and bombers could participate, South Korea’s Yonhap news agency said. U.S. Forces Korea said such assets will likely be deployed in line with past practices but declined to elaborate citing security protocol.
“Strategic” of course denotes nuclear forces, which again suggests the strong likelihood that Pyongyang will react fiercely.
“Large-scale military drills were halted under the administration of former President Moon Jae In, which prioritized improvement in the inter-Korean relationship,” Kyodo News notes further of the significance of the timing. “But President Yoon Suk Yeol, who took office in May 2022, resumed the Freedom Shield exercise last year after a five-year hiatus.”
And last week, The Wall Street Journal highlighted that North Korea’s Kim has become a “bigger threat” at a moment “the world was looking elsewhere” – given the raging conflicts in Ukraine and Gaza. “Kim is playing a longer, more strategic game with a nuclear arsenal that has quickly grown since talks broke down at the February 2019 summit with former President Donald Trump in Hanoi,” WSJ wrote. “That has made predicting his next steps murkier and more worrisome.”
Recent tensions in January have centered on South Korea’s islands which lie close to the border with the north…
VIDEO: South Korea soldiers patrol border island after North’s artillery drills.
On the remote border island of Yeonpyeong, heavily armed soldiers locked up the beaches at dusk — a reminder of the picturesque spot’s proximity to nuclear-armed North Korea pic.twitter.com/R8PGuyiiET
The report continued: “Particularly troubling, security experts say, is how sure-footed Kim looks, despite widespread food shortages, a more confrontational South Korean administration and a U.S. that is rotating nuclear assets into the region more often.”
Swiss Voters Give Themselves Extra Month Of Pension, Reject Raising Retirement Age
Dear lazy Americans: this is how the Swiss do it…
Over the weekend, Swiss voters gave themselves an extra month’s pension each year, in a nationwide referendum focusing on living standards for the elderly.
The government had warned that the increased payments would be too expensive to afford, but we live in an age where nobody cares anymore about long-term costs so may as well live it up and enjoy it, and indeed almost 60% of voters said ‘yes’ in Sunday’s poll. Separately, 75% rejected raising the pension age from 65 to 66.
The maximum monthly state pension is €2,550 (£2,180; $2,760) – not enough, many say correctly, to live on in Switzerland where a Big Mac burger costs $8.17, 43% more than in the US.
The proposal to increase pensions came from the trades unions – but was opposed by the Swiss government, parliament, and business leaders, who argued it was unaffordable.
The result was described as a “historic victory for retirees” by Avivo, a Swiss association that defends the rights of current and future pensioners.
The cost of living in Switzerland, particularly in cities such as Zurich and Geneva, is among the highest in the world. Furthermore, health insurance premiums, which are obligatory for everyone, have been rising fast, and older people sometimes struggle to pay them, almost as if Obamacare has launched a Swiss branch.
Women who may have had work breaks to raise a family, and immigrants recruited decades ago to work in Swiss factories, restaurants, or hospitals, can find it particularly difficult to make ends meet according to the socialists at the BBC.
Meanwhile, more and more people are working into their 70s not out of choice, but out of necessity. Meanwhile among the younger generation, work related stress and burnout are increasing.
Voters in Switzerland often take their government’s advice about money matters: a few years ago, like idiots, they actually rejected an extra week’s holiday a year. This time, however, they learned their lesson and said enough was enough, using the power that Switzerland’s system of direct democracy gives them to vote themselves an extra month’s pension each year.
The initiative also secured the required double-majority: getting the popular vote, and also majorities in most of the country’s 26 cantons.
The move brings the state pension into line with Switzerland’s salary system, which is also paid in 13 instalments, meaning workers get a double payment in November.
The system was originally designed to help people ahead of Christmas, and the annual tax bill. As Swiss retirees pointed out, pensions were taxed too, and Christmas fun did not stop at 65.
In a further sign the Swiss are keen that life should not be all work and no play, they also overwhelmingly rejected raising the retirement age. These votes would, the government said repeatedly, have to be paid for.
Voters, though, looking at Switzerland booming economy, whose success is in large part thanks to their hard work, clearly believe their country can afford it.
Resveratrol is one of the most studied natural polyphenol compounds and is found in the skins and seeds of red and purple grapes, berries, peanuts, and pistachios.
When plants face constant environmental stress such as from fungus, drought, ultraviolet radiation, and insect infestation, their intrinsic defense mechanism is to produce polyphenols.
Resveratrol was isolated by a Japanese scientist in 1939 from the roots of the white hellebore plant. It gained attention in 1992 when researchers suggested that this component found in red wine had cardioprotective qualities that might explain the “French paradox,” the observation that the French drink a lot of red wine and have low rates of heart disease despite a high-fat diet.
Since then, resveratrol has been studied more broadly and has shown tremendous protective potential at the cellular level.
“The in vitro and in vivo studies point to the exact mechanisms of how it works in terms of being cardioprotective, cancer preventative, cancer therapeutic, neuroprotective, helpful in people who are obese, [helpful for] glucose metabolism, anti-inflammatory, and an antioxidant,” Dr. Nathan Goodyear, a medical doctor and integrative cancer expert, told The Epoch Times.
Research has shown that calorie restriction can delay or prevent many age-related diseases and extend lifespan, and resveratrol can mimic the action of calorie restriction.
Although calorie restriction has many benefits, including increased insulin sensitivity and improved overall metabolic health, most people don’t want to spend the day counting calories or fasting.
Resveratrol mimics calorie restriction by activating signaling proteins called sirtuins, which can regulate inflammation, repair DNA, promote insulin sensitivity, and help form neurons in the brain. These proteins are also associated with healthy aging and longevity.
“The sirtuin system is a complex regulatory process involving seven sirtuin genes expressed in multiple tissues,” registered dietician nutritionist Kelsey Costa told The Epoch Times by email.
Silent information regulator 1 (SIRT1) is one of the seven sirtuin genes activated by resveratrol. It promotes longevity through metabolic processes such as insulin release, lipid mobilization, and healthy stress response. A review published in the Annals of the New York Academy of Sciences found that people who had fasted for one week had a twofold increase in the SIRT1 gene in their fat cells.
The review also mentioned studies involving resveratrol and the activation of SIRT1 that showed a 70 percent increase in yeast lifespan, life-extending potential in worms and flies, and an increase in the survival of obese middle-aged mice.
“SIRT1 is abundant in the blood vessel system, plays a crucial role in creating and growing new blood vessels, and is significantly stimulated by resveratrol,” Ms. Costa said. “Ultimately, sirtuin genes create proteins that affect heart-related functions like growing new blood vessels, decreasing hypertension, and preventing atherosclerosis, which provides a plausible explanation for resveratrol’s diverse health benefits.”
Cardiovascular Benefits
Cardiovascular disease is primarily the result of a chronic low-grade inflammatory condition that can cause atherosclerosis, high blood pressure, heart attacks, and heart failure.
A 2022 systematic review and meta-analysis of six randomized controlled studies concluded that “resveratrol can be used as a potential treatment in patients with [cardiovascular disease] by reducing inflammatory conditions.” It is also a potent vasodilator that releases nitric oxide and lowers blood pressure.
According to Ms. Costa, “resveratrol decreases the serum concentrations of pro-inflammatory cytokines, which are critical compounds involved in the body’s inflammatory response, suggesting resveratrol may be beneficial as an adjuvant therapy for chronic inflammation and cardiovascular disease.”
Most studies have been performed in the lab or on animals and show the positive effects of resveratrol on the heart, prompting several randomized controlled trials in humans over the past decade to determine if the same benefits apply to both healthy and chronically ill humans. The results in humans have been variable, possibly due to inconsistent protocols and doses of resveratrol. Yet many studies have shown positive effects on coronary artery disease, including decreased arterial stiffness, hypertension, inflammation, and cholesterol.
Dr. Goodyear believes resveratrol can also protect the heart from certain types of chemotherapy that may damage it. “Although we primarily use natural and holistic treatments for cancer, we will use some conventional therapies, including chemotherapy,” he said. “If we ever use a low-dose form of chemotherapy with a potential impact on the heart or kidneys, resveratrol can be added in to protect these patients.”
May Regulate the Gut Microbiome
The gut microbiome, a community of trillions of microorganisms living in the digestive tract, is believed by many to be the most critical factor in overall health. It consists of bacteria, viruses, fungi, and other microbes; when they live in concord in the gut, all body systems work harmoniously. But when those microorganisms are unhealthy and unbalanced, it can lead to several acute and chronic illnesses, including gastrointestinal problems, obesity, Type 2 diabetes, cancer, and autoimmune diseases.
Recent research suggests that resveratrol’s antioxidant, anti-inflammatory, and other beneficial properties can help regulate the microbiome and protect the intestinal tract from inflammation and impending disease. While researchers are still investigating resveratrol and its role in regulating overall health through the gut microbiome, they believe it can protect the intestines by strengthening the tight junctions of the intestinal wall. A strong intestinal barrier helps with nutrient absorption and prevents a “leaky gut,” which allows bacteria, toxins, and undigested food particles to pass through and enter the bloodstream.
Resveratrol’s antioxidant and anti-inflammatory properties can also prevent pathogenic bacteria and fungi from growing inside the intestine and increase immune cells to ward off possible diseases further, including many types of cancer.
May Suppress Cancer Cells
In 1997, researchers found that resveratrol prevented cancer cell growth on the skin of mice. Since then, an overwhelming number of studies have focused on resveratrol’s anti-cancer properties.
Resveratrol affects cancer at different stages, from initiation to progression, through various signaling pathways regulating cell growth, cell destruction, inflammation, metastasis, and the development of new blood vessels. An interesting aspect of resveratrol is that it can protect normal cells while causing cancer cell death. Researchers have also found that lower concentrations of resveratrol can increase the expression of cell survival proteins, while higher concentrations stimulate cancer cell death.
A 2015 study suggests that resveratrol may inhibit the growth of gastric cancer cells and induce programmed death of potentially cancerous cells. Human gastric cancer cells were injected into mice, and resveratrol was injected near the tumor cells, significantly inhibiting their growth. The researchers suggested that even though resveratrol’s bioavailability is low in humans and it’s quickly processed and excreted by the body, it has metabolites, or byproducts, that may continue to have beneficial effects.
Another study found that resveratrol may help actinic keratosis—rough, scaly patches of skin that are potentially cancerous.
Studies have shown that resveratrol can target the p53-mediated pathway to induce apoptosis, inhibiting the growth of colorectal cancer cells. Tumor suppressor p53 is a crucial protein involved in DNA repair and apoptosis (cancer cell death). Even in tumor-suppressor p53 mutations where cancers don’t respond well to chemotherapy, resveratrol treatment was found to stop cell growth in cervical cancer. It was also shown to inhibit prostate cancer cell growth and induce apoptosis by inhibiting a major protein signaling pathway.
Clinical trials involving resveratrol and other cancers, including colon and liver cancers, are ongoing and continue to have encouraging results.
Resveratrol may also be chemoprotective, meaning that it may protect healthy cells from damage during chemotherapy treatment.
In lab studies, resveratrol demonstrates several mechanisms that induce programmed cell death in several cancer lines and shows clear anti-cancer effects. Since natural resveratrol has clear drawbacks because of its limited bioavailability, there is interest in the development of resveratrol derivatives.
Dr. Goodyear told The Epoch Times that despite the limited studies, there are advances in solving resveratrol’s problems with administration and bioavailability. Still, more studies are needed that look specifically at women with breast cancer, men with prostate cancer, people with cardiovascular disease, or those who have had a stroke.
“The problem with that is it takes time and money,” he said. “Most people who have a lot of interest in these natural therapies unfortunately don’t have the money to put into the large clinical trials we need to solve the limitations.”
May Protect Against Alzheimer’s and Parkinson’s
Unlike other antioxidants, resveratrol has the unique ability to cross the blood-brain barrier. Studies are ongoing, and researchers believe there is tremendous potential for resveratrol to become a viable therapy for Alzheimer’s disease and Parkinson’s disease through its antioxidant and anti-inflammatory actions.
Five of the primary causes of Alzheimer’s disease progression have shown potential for control with targeted resveratrol treatment. These include protein misfolding, cellular metabolism, inflammation, mitochondrial dysfunction, and telomere shortening.
Proteins can’t work effectively when they aren’t in the correct formation. The protein misfolding in Alzheimer’s disease involves accumulating abnormally folded beta-amyloid and tau proteins. Resveratrol has been shown to inhibit beta-amyloid malformation by decreasing its production through sirtuin pathways. It interferes with the amyloid pathway via its antioxidant and anti-inflammatory properties and reduces amyloid plaque production of free radicals and neuroinflammation.
Although the effects of misfolded tau proteins aren’t as widely studied as beta-amyloid proteins, resveratrol’s activation of SIRT1 and the following mechanisms can reduce tau levels and improve cognitive function.
Cellular Metabolism
Researchers have found that fasting can benefit cognitive performance and Alzheimer’s disease prevention by releasing brain-derived neurotrophic factor, which regulates cellular processes involved in normal brain function; reduced levels are often associated with degenerative brain disorders.
Just as resveratrol can benefit the heart by mimicking calorie restriction through the expression of SIRT1, it can also improve cognition by enhancing mitochondrial function, helping to boost the destruction of free radicals that promote cognitive decline.
Inflammation
Localized inflammation and microglia, the immune cells of the brain that regulate the brain’s response to illness through inflammation, contribute to neurodegeneration and cognitive decline in the brain. Reducing this brain inflammation appears to be effective in slowing and even modifying the progression of Alzheimer’s disease in animal models.
Although the mechanism is still unclear, laboratory and animal studies have shown that resveratrol effectively reduces neuroinflammation.
Mitochondrial Dysfunction and Free Radicals
Mitochondria are called the “powerhouse of the cell” for good reason. Their primary function is to produce adenosine triphosphate (ATP), the prime cellular energy source essential for muscle contraction, cell membrane potential, maintaining the proper electrical pathways between cells, and overall cellular metabolism.
Healthy mitochondria have antioxidant defense mechanisms that protect cells from free radicals that damage cells and lead to aging and disease. Mitochondria’s control over apoptosis (programmed cell death) is crucial for eliminating damaged or malfunctioning cells that may contribute to neurodegeneration.
Brain cells (neurons) have high energy requirements and contain thousands of mitochondria to generate ATP to maintain cellular metabolism and keep the brain working properly. An alteration in the mitochondrial function of neurons can start a cascade of cellular damage by inhibiting neuronal defense against free radical production. As neurons are damaged and begin to die, progression into the early stages of Alzheimer’s begins. Resveratrol can counteract free radical production by activating a pathway involving the SIRT1 protein and boosting mitochondrial energy and efficiency.
Telomere Shortening
Telomeres are the repetitive DNA sequences on the end of chromosomes that act as protective caps, preventing the loss of fundamental genetic information as cells divide. Every time cells divide, telomeres become shorter and shorter. Eventually, when they are so small and can no longer divide, they die. Although inevitable and part of aging, protecting telomeres from becoming reduced prematurely promotes more youthful cells and prevents age-related diseases.
Shortened telomeres play a significant role in Alzheimer’s by increasing the potential for DNA damage, cellular dysfunction and impaired regeneration, neuroinflammation, and eventual neuronal death.
Polyphenols such as resveratrol preserve telomere length, promoting the expression of necessary enzymes within the brain that help maintain telomeres. Resveratrol activates a SIRT1 pathway to protect DNA from free radical damage.
May Increase Insulin Sensitivity
Increasing evidence suggests that oxidative stress plays a critical role in diabetes progression. Resveratrol’s potent antioxidant properties and ability to activate sirtuins, particularly SIRT1, make it a potential candidate for targeting the underlying cellular abnormalities of Type 2 diabetes, obesity, and metabolic disease.
Studies have found that resveratrol can safely reduce the chronic inflammatory properties often associated with obesity while restoring insulin sensitivity, reducing inflammatory injury to blood vessels, and attenuating oxidative stress on the pancreas as insulin levels increase. These studies also show that resveratrol can help save pancreatic beta cells and improve glucose tolerance with SIRT1 activation.
Clinical studies lasting from four weeks to one year revealed that supplementing with grape extract and resveratrol for one year had beneficial effects on Type 2 diabetes and high blood pressure. Resveratrol supplementation for more than 45 days lowered blood pressure, glycated hemoglobin (HbA1c), fasting blood glucose, insulin levels, and insulin resistance, and even improved HDL “good” cholesterol levels.
May Relieve Joint Pain
Resveratrol’s anti-inflammatory properties have been shown to slow down or stop the degeneration of rheumatoid arthritis and osteoarthritis.
Rheumatoid Arthritis
Resveratrol has shown the potential to mediate pathways and enzymes that can inhibit the production of inflammatory molecules in the body. Its antioxidant properties can also help protect joints from rheumatoid arthritis-related oxidative stress.
One study found resveratrol effective when used in combination with methotrexate, a traditional medication used to treat rheumatoid arthritis, showing a synergy between the two therapeutics.
Osteoarthritis
A recent study suggests that resveratrol can potentially prevent and treat knee osteoarthritis (KOA) by reducing inflammation, apoptosis, and cartilage degeneration. The study concluded that resveratrol will become an alternative therapy for preventing and treating KOA.
A 90-day pilot study of 110 men and women with KOA treated with both meloxicam, a nonsteroidal anti-inflammatory, and resveratrol significantly reduced knee pain. The levels of inflammatory biomarkers in their blood were also reduced considerably compared to the placebo group. The researchers suggested resveratrol may be an effective adjunct supplement for patients taking meloxicam for KOA.
Potential Risks
“While resveratrol has been linked to various health benefits, it’s important to consider potential risks and adverse outcomes,” Ms. Costa said. “At high doses, resveratrol has been reported to have toxic effects, cause gastrointestinal issues, and interfere with certain enzymes, which can lead to interactions with other drugs.”
Potential medication interactions include anticoagulants and anti-platelet drugs since resveratrol may cause clotting and, therefore, may be contraindicated. It’s best to consult a physician before taking resveratrol to determine the proper dosing and potential drug interactions.
Overall, resveratrol’s adverse effects have been minor, and many studies have established that resveratrol is well-tolerated and safe for humans, though dosing levels remain inconclusive.
The Bottom Line
Resveratrol is a powerful antioxidant and anti-inflammatory that has shown tremendous promise across extensive clinical studies in lab animals and humans, yet there’s much to learn about its potential in preventing and treating future chronic health conditions.
For instance, there is no established therapeutic dosage of resveratrol. According to Ms. Costa, “The dose of resveratrol administered in research studies is much higher than what one would typically consume in a daily diet or from drinking red wine and seems to have a more pronounced effect when taken as a daily supplement.”
Much of the research to date has been in animals and test tubes using higher levels of resveratrol than found in a normal diet. These studies have led to significant progress in identifying its mechanisms of action and how it translates into various health benefits. However, further human studies are needed to confirm its efficacy, potential adverse effects, and the dose–effect relationship.
“When you look at resveratrol broadly, it’s super exciting, and there is so much we don’t understand about it,” Dr. Goodyear said. “I think there is no doubt resveratrol will positively impact a wide spectrum of diseases preventatively and in targeted treatments.”
Poll: Nearly Half Of Young People Won’t Spend $10 Monthly On Climate Action
Radical climate change warriors in the White House have made it their mission to destroy the fossil fuel industry (and with that goes the economy) but also brainwash as many youth into believing there’s an imminent climate emergency. However, a new poll shows young people are unwilling to make even the slightest financial sacrifice, not even the cost of one avocado and toast sandwich per month, for ‘green’ causes, and perhaps this underscores that the youth are merely serial virtue signallers.
The Daily Mail obtained a copy of a new survey commissioned by CRC Research for the 85 Fund. It reveals that fewer than half of the respondents aged 18-34 will spend $10 monthly to combat climate.
Less than half (45%) of the youngest crop of voters aged 18-34 would be willing to spend $10 or less per month to combat climate change, according to a recent survey by CRC Research for 85 Fund obtained exclusively by DailyMail.com.
And one out of five (20%) in the same age bracket responded that they would not pay anything at all, according to the poll results.
DailyMail said respondents aged 25-34 were very similar to the 18-34 age group, an indication the Biden administration’s propaganda campaign to push climate anxiety amongst the youngest generations is failing. If the administration continues pushing such a radical agenda – they risk falling out of touch with average working-class folks.
The CRC also showed how young people are vocal about climate change but fail to spend their own money fixing it. This could be due to an era of failed Bidenomics as the inflation monster crushes households.
“Despite claims they are leading the charge on climate change, it turns out young people are actually just sheep in wolves clothing. They demand ‘climate action,’ but demand someone else pay for it,” said Steve Milloy, a lawyer who served under the Trump administration.
Milloy continued: “They disguise their rank hypocrisy by posturing as ‘climate activists.’ Their refusal to put their money where their mouths are just underscores how unserious they are as citizens and voters.”
Fed Bubble Ignites “Great Retirement” Wave As Baby Boomers Party Like It 1999
As the Magnificent 7 tech stocks and home prices grind higher, there has been a massive surge in the number of Americans taking early retirement. Bloomberg has coined this phenomenon the “Great Retirement Boom.”
A model designed by economist Miguel Faria-e-Castro at the Federal Reserve Bank of St. Louis shows the US has around 2.7 million more retirees than initially forecasted.
This trend emerges as retirement savers pile into tech stocks (we’ve asked: Is this a good idea?).
A recent Bloomberg Markets Live Pulse survey showed about half of the retirement savers were buying stocks as a direct response to soaring prices – far surpassing the 6% who said they had added the traditional inflation hedges.
The latest expectations for interest-rate cuts from the Fed this year have fueled the artificial intelligence bubble – with signs of Dot Com lurking in markets.
Or 1930s…
Maybe it’s different this time.
According to Bloomberg, soaring stocks are already “convincing those already retired they needn’t return to the workforce.”
Unless the Fed is committed to a never-ending program of zero interest rates and quantitative easing… Then, retirement savers have nothing to worry about. However, when the financial elites prick the bubbles through a prolonged tightening cycle, we’ll see some those retirees return to the workforce as Walmart greeters.
By Sagarika Jaisinghani, Bloomberg Markets Live reporter and strategist
Europe Inc. just reported its worst earnings season relative to the US in three years, according to data from JPMorgan. And worst yet, strategists are bracing for more pain before recovery starts.
Profits of Stoxx Europe 600 firms are estimated to have dropped 11% in the fourth quarter, 2 percentage points more than analysts expected, the research shows. The decline is driven by sputtering economies — with both Germany and the UK in recession — as well as underwhelming growth in China, a key market for European companies.
The development marks a stark contrast to Corporate America, where the latest earnings grew by a better-than-expected 8%, data compiled by Bloomberg Intelligence show. That’s mainly thanks to the seven-largest stocks though, most of them tech. Without them, the rest of the S&P 500 saw a 1.6% drop in profits — still outperforming Europe.
Fund managers and strategists aren’t fully convinced about an imminent recovery for European earnings, given the continent’s economic malaise, the bleak outlook for commodity prices and lack of AI darlings akin to Nvidia. While Europe has AI beneficiaries such as ASML, ASM International and BE Semiconductor, their performance has lagged well behind Nvidia. Data from BI shows S&P 500 profits are expected to rise 8.4% this year compared with a 4.4% increase in Europe.
A Citigroup index shows analysts are bearish, with earnings downgrades consistently outnumbering upgrades in the past five months. Still, Citi strategist Beata Manthey says the pessimism may have gone too far. “The silver lining for Europe is that US earnings are priced for perfection,” Manthey says. “In Europe, investors are pricing in flat earnings growth. That lowers the bar for earnings beats,” especially if local economies or China deliver a “positive surprise.”
Signs of an improvement in the macro outlook are already showing up in the performance of cyclical stocks, which are more sensitive than their defensive peers to economic growth. Analysts are raising profit estimates for cyclicals at a faster clip than for defensives as business activity ticks up, according to data compiled by Bloomberg.
Barclays strategist Emmanuel Cau is also optimistic that an improving business cycle will feed a broader equity rally. “Soft data” such as manufacturing and services sector activity tend to be a good leading indicator for future earnings growth, Cau says, and they’re signaling a nascent rebound. “Investors are paying up ahead for potential EPS recovery later,” he says.
Fund managers in a recent Bank of America survey were broadly cautious, with about 54% of participants seeing downside for European EPS in the coming months. Still, that number is down from 75% in January and 88% in December. Hopes are also growing that luxury goods makers — which depend on China for a significant share of revenue — will revive along with demand from the world’s second-biggest economy. Resilient earnings at LVMH have fueled a 27% surge in the MSCI Europe Textiles Apparel & Luxury Goods Index the since mid-January.
“We agree that the first quarter is likely to be challenging with double-digit negative earnings growth,” Deutsche Bank strategist Maximilian Uleer says. But he expects a “pronounced” recovery in the second half of the year against the backdrop of global economic growth.
China Sets Economic Growth Target At Around 5% This Year, Will Boost Defense Spending By 7.2%
China will target economic growth of “around 5%” this year as it works to transform its development model (read magically grow while aggressively deleveraging), curb industrial overcapacity (read build less ghost cities while trying to contain the fallout from the biggest real estate crisis in history), defuse property sector risks (read transfer ownership from countless insolvent property developers to the state while encouraging foreign investment) and cut wasteful spending by local governments (read limit corruption in a country where 1 out of every 3 yuan is embezzled, stolen or otherwise vaporized), Premier Li Qiang said on Tuesday according to Reuters.
Li delivered his maiden work report at the annual meeting of the National People’s Congress (NPC), China’s rubber-stamp legislature, in the cavernous Great Hall of the People in Tiananmen Square.
The growth target – already the lwoest in decades – was identical to last year’s but analysts warned that it would be harder to achieve this year than in 2023, when growth was flattered by a low base during the pandemic, and will require stronger government stimulus for China to reach it, as the economy remains reliant on state investments in infrastructure that have led to a mountain of municipal debt.
Almost all of the 27 economists polled by Bloomberg before the National People’s Congress expected Beijing to announce a growth target similar to last year. Economists polled in a separate, broader survey, however, said the economy would likely grow at a more realistic 4.6% in 2024.
“It’s what the Communist Party thinks is needed to keep the Chinese economy going and account for needs like employment,” Chong Ja Ian, an associate professor of political science at the National University of Singapore, said of the GDP goal for 2024.
Investors are watching this year’s “Two Sessions” of the National People’s Congress, the country’s parliament, and the Chinese People’s Political Consultative Conference, the top advisory body, for clues as to how dictator Xi plans to tackle the slowing economy. The premier’s work report, delivered to the NPC’s nearly 3,000 delegates in the Great Hall of the People in Beijing, is the keynote speech of the Two Sessions, laying out the party’s most important annual economic goals and setting the tone for policymakers for the rest of the year.
“We expect a moderate level of policy support, but given a less favourable base effect, pervasively downbeat sentiment, and property market weakness remaining an overhang, reaching 5 per cent growth this year may be more difficult,” ING greater China chief economist Lynn Song said in a note ahead of the work report.
An aborted COVID recovery in the past year has laid bare China’s deep structural imbalances, from weak household consumption to increasingly lower returns on investment and a collapse in loan demand, prompting calls for a new development model.
A property crisis, deepening deflation, a stock market rout, mounting local government debt woes and a surge in protests by angry Chines workers have increased the pressure on China’s leaders to respond to these calls.
“We should not lose sight of worst-case scenarios and should be well prepared for all risks and challenges,” Li said.
“In particular, we must push ahead with transforming the growth model, making structural adjustments, improving quality, and enhancing performance.”
There were no immediate details on the changes China intended to implement.
In setting the growth target, policymakers “have taken into account the need to boost employment and incomes and prevent and defuse risks,” Li said, adding China intended to have a “proactive” fiscal stance and “prudent” monetary policy.
China plans to run a budget deficit of 3% of economic output, down from a revised 3.8% last year. While generally in line with expectations, the country’s stock market observers were likely hoping for “an increase in the official fiscal deficit for any clues on policy support for property and other parts of the economy,” said Derek Tay, head of investments at Kamet Capital Partners, adding that China still has other fiscal tools to work with. But, as reported in late 2023, it plans to issue 1 trillion yuan ($139 billion) in special ultra-long term treasury bonds, which are not included in the budget. That said, the impact of such debt on growth would be modest at best: China needs trillions (in USD) in new debt to kick start to languishing and deflating economy.
While the stimulus target is the same as last year, the central government special bond issuance was new compared with a year earlier.
Beijing also plans to boost defense spending by 7.2%, well above the country’s economic growth target of around 5%. The pace of military expansion matches the spending budgeted under former Premier Li Keqiang’s watch last year. This marks the third year in a row of military expansion above 7%, even as the economy continues to slow down.
China trails only the U.S. in military spending and has been beefing up its armed forces amid tensions with the U.S. and the West. President Xi Jinping has emphasized the significance of preparing for the 100th anniversary of the establishment of the People’s Liberation Army in 2027.
The details of the defense budget expansion were not available, but the focus is understood to be on catching up with the U.S. while filling the gap in nuclear capabilities by enhancing other conventional weaponry. it also wasn’t clear if China plans on invading Taiwan this year or will once again kick this particular start to WW3 to next year.
The special bond issuance quota for local governments was set at 3.9 trillion yuan, versus 3.8 trillion yuan in 2023. China also set the consumer inflation target at 3% and aims to create over 12 million urban jobs this year, keeping the jobless rate at around 5.5%. Meanwhile, it remains unclear what China’s all-important youth unemployment is – the data was suspended for reporting when it hit a record over 20% and has since been restored in a several adjusted format which nobody trusts.
“The Chinese government does not want to stimulate the economy too much, … and also wants to keep leverage relatively low,” said Xia Qingjie, economics professor at Peking University. The budget deficit target can be adjusted later this year, if needed, Xia added.
According to Paul Pong, managing director at Pegasus Fund Managers, for China to achieve 5% economic growth this year forceful measures focused on boosting consumption will be needed as the property sector becomes a smaller driver of growth, with electric vehicles, sportswear and healthcare sectors are among the areas that might benefit most.
To achieve the 5% growth target, China will need to take measures to ease developers’ financing stress to avoid any unfinished homes. Sentiment remains weak, especially among foreign investors, given the property problems in China.
Analysts expect China to lower its annual growth ambitions in the future. The International Monetary Fund projects China’s economic growth at 4.6% this year, declining further in the medium term to about 3.5% in 2028.
Li also said, that China will continue to pour resources into tech innovation and advanced manufacturing, in line with President Xi Jinping’s push for “new productive forces.” Some analysts have criticized this policy, however, saying it exacerbates industrial overcapacity, deepens deflation and heightens trade tensions with the West. At the same time, reform advocates, worried about record low consumer confidence and plunging investor and business sentiment, want China to return to a path of pro-market policies and boost household demand.
The NPC is not the traditional venue for sharp policy shifts, which are usually reserved for events known as plenums, held by the Communist Party between its once-every-five-year congresses. One such plenum was initially expected in the final months of 2023. While it could still take place later this year, the fact that it has not yet been scheduled has fuelled investor concerns over policy inaction.
The extent to which China’s economic expansion is reached or spread across the entire economy is increasingly difficult to ascertain independently given greater restrictions on data accessibility, said Chong Ja Ian, an associate professor of political science at the National University of Singapore, said of the GDP goal for 2024.
As noted earlier, China also abruptly scrapped a three-decade tradition for the premier to hold a press conference at the NPC, fanning fears about opaque policymaking.
Morgan Stanley recently came out with their 3 Themes that will impact markets for many years: longevity, AI tech diffusion, and decarbonization, i.e. the transition from hydrocarbon fuels to so-called “green energy.”
That’s the status quo: everything’s great! Pills that cost $1,000 a month will make us live longer, AI will increase corporate profits (which is the entire point of the economy, of course) and those who invest in the “green energy” transition will be rewarded with fabulous wealth.
That all sounds peachy, but the real world will be defined by four much different themes:sclerosis, dysfunction, debt saturation and power asymmetry.
1. Sclerosis: the same old nodes of power cling onto power and so nothing changes because nothing can change: those in power must maintain or expand their power, regardless of what comes along, and that sclerosis is the systemic problem that cannot be resolved.
2. Dysfunction: nothing works due to the consequences of sclerosis: those who cling to power do so by eliminating every dynamic of open, self-correcting systems: they get rid of competition (every sector is dominated by monopolies, cartels or state-cartels), they get rid of transparency (information asymmetry is how they maintain power) and they have a lock on regulatory complexity / capture: first jump through all these hoops and maybe we’ll let you propose some worthless policy tweak that leaves our power intact. Or we’ll co-opt you by inviting you to become one of our flunkies, PR flacks, factotums, enforcers, lackeys, etc.
In a system rigged to maximize the profit and power of the few at the expense of the many, nothing works because the system is no longer capable of self-correction.
3. Debt saturation: 15 years of expanding credit has created the illusion we can pay for everything, no matter how costly, from future earnings, basically forever. So we need trillions to transition to “green energy,” no problem, we’ll borrow it. We need more trillions to pay for an aging, increasingly sickly populace, no problem, we’ll borrow it. We need to borrow more trillions to fund all the status quo grift and graft, no problem, we’ll borrow it.
And since we can pin interest rates to zero forever, we can borrow whatever tiny sums we need to pay the interest on hundreds of trillions in new debt, no problem. Except for one little dynamic called debt saturation: future earnings are not guaranteed, and at some point the income cannot sustain both the eternally expanding consumer and state spending needed to keep the Waste Is Growth Landfill Economy from imploding and the rising debt service on the ballooning debt.
We can afford only one: either borrow and spend to keep the Waste Is Growth Landfill Economy humming, or we can devote that income to servicing rising debt. We can’t do both, so one or the other will collapse: either consumer/state borrowing and spending or the Palace of Debt.
This reality increases risk, and capital eventually demands a real return. Interest rates can’t stay at zero, so the costs of servicing the soaring debt rises rapidly. At the same time, the immense expansion of credit–money borrowed from future income to be spent today–generates inflation, as the flood of credit needed to keep a sclerotic, dysfunctional status quo afloat outpaces the value being generated by all the trillions being borrowed and blown.
No one at the trough of “free money” will give up their place, and so the system is rigged to fail: we have to keep borrowing trillions to keep all the incumbents, entrenched interests and those collecting benefits happy, but as interest payments rise, we need to borrow more trillions just to pay the interest. And so on, in a self-reinforcing feedback loop.
4. Power asymmetry is my term for the structural inequality and bondage that characterize the global status quo. The many have very little power over anything, while the few hoard the power to make sure they keep what they have and to protect their perquisites from competing elites and populist movements. Debt serfdom is a good example of bondage–you need to borrow to live–and power asymmetry: debt-serfs have essentially zero power in the economy, society or the sclerotic systems of governance.
No amount of AI or new technology will change any of this, because all those tools serve those already in power. In effect, AI and all other new technologies simply serve to solidify power asymmetry and thus sclerosis and dysfunction. And since the system demands “free money” borrowed from the future to keep everyone at the trough happy, it also guarantees debt saturation, which eventually triggers a phase change much like liquid water (liquidity) suddenly freezing into ice.
Everyone at the trough believes that the transition from liquid water (free flowing credit) to ice cannot possibly happen. So when it happens, everyone will be surprised. What do you mean, there are limits?
Former Twitter CEO, Three Other Fired Officials, Sue Musk For $128 Million In Severance
Instead of giving him a medal for demonstrating that their censoring, woke, CIA-controlled bloated media platform can operate with 80% less diversity hires and can actually grow much faster when stripped of its unbearable propaganda, four ex-Twitter executives, including former CEO Parag Agrawal, sued X (f/k/a Twitter) company owner Elon Musk for allegedly stiffing them on more than $128 million in severance payments after they were ousted from the company.
The former top officials, many of whom were fired for cause within seconds of Musk “letting that sink in” to the then-Twitter San Francisco office, said Musk showed “special ire” toward them after he took over the social-media platform in 2022, publicly vowing to withhold their severance to recoup about $200 million from the $44 billion deal, according to a lawsuit filed Monday in federal court in northern California.
Twitter, which Musk renamed X, has been accused in several suits of numerous labor and workplace violations, including failing to pay severance to thousands of Twitter workers whose only job apparently was to censor their own users, and who were laid off in the minutes and months after the takeover. The company also was accused in a raft of suits of failing to pay millions owed to vendors and landlords while purportedly trying to stay financially solvent.
“Under Musk’s control, Twitter has become a scofflaw, stiffing employees, landlords, vendors, and others. Musk doesn’t pay his bills, believes the rules don’t apply to him, and uses his wealth and power to run roughshod over anyone who disagrees with him,” lawyers for Agrawal and the other ex-executives said in the 38-page complaint. It was unclear if they were transcribing what the CIA told them to say as had been the case customary for years, or if they actually had an original thought for once.
As soon as he took over Twitter, Musk fired several other top-ranking executives in addition to Agrawal: Vijaya Gadde, who was the company’s top censorship officer and also pretended to be in charge of legal and policy; Ned Segal, the chief financial officer; and Sean Edgett, Twitter’s general counsel.
They were all fired for cause, and were deemed unsurprising at the time: after all the entire former Twitter management team was captured by the deep state, a bunch of clueless pawns meant to keep Twitter a venue where a small number of very vocal liberals and socialists could pretend they were the vast majority of the country, when in reality they were just a handful of useless socialists.
Each of the four executives was due to receive substantial payouts as part of Musk’s agreement to buy the company, which included language that would expedite the their unvested stock awards. Agrawal alone was set to get roughly $50 million in severance payouts, however Musk managed to short-circuit the process by firing Agrawal for cause with minutes to spare before the contracts became enforceable.
In early December, X failed in court-ordered mediation to resolve claims by thousands of former Twitter employees who say they were cheated of severance pay.
Also in December, San Francisco judge rejected X’s request to dismiss a lawsuit by employees claiming they were denied 2022 bonuses, despite being promised in the months leading up to Musk’s acquisition that they’d be paid 50% of their target amounts.
