Month: May 2024

Via Greg Hunter’s USAWatchdog.com,

Dr. Chris Martenson holds a PhD in pathology from Duke University, is a futurist and an economic researcher.  Dr. Martenson was one of the very few scientists who called BS on the FDA’s approval of Pfizer’s CV19 vax back in August 2021.  Dr. Martenson went on the record to say, “Comirnaty CV19 Vax Approval is Actually Fraudulent.”

Now, Dr. Martenson is out warning about a new kind of fraud that could leave you broke in the next financial disaster.  Dr. Martenson thinks financial trouble of Biblical proportions could be coming sooner than most people think.  Dr. Martenson is not worried about a brokerage going under, such as Lehman Brothers in the 2008. 

Martenson is worried about the entire system melting down and says, “When the system freezes up, they get really scared.  If you are not a complete moron, you would make that system smaller because it scared you that much, but instead, they made it even bigger…”

“We not only have to worry about a brokerage going down, but we now have to worry about these clearing parties…

These are the houses that are supposed to be clearing all the trades with the derivatives and the loans… The law says the brokerages have to hold your shares and bonds you have in a proportional amount.  They don’t hold them.  A higher company does that . . . . and you can’t peer into them.

  It you want to see what Fidelity or Schwab has . . . . I found out you cannot see an audit trail.”

In a new market meltdown, Dr. Martenson sees chaos and gives a hypothetical example:

“China attacks Taiwan, and there is a 10 sigma move in the bond market.  Oh no, all these derivatives have blown up.  These people are supposed to be winners, and these people are supposed to be all losers.  No, no, they don’t have any money for that stuff. 

It’s too complicated.  I don’t think anybody understands how this works anymore.  I could not find anybody who could tell me the whole thing.  I could find people who knew bits and pieces, but they knew their slice…

I am trying to stitch this thing all together.  I get uncomfortable when I can’t answer the most basic questions, and that is how much risk is there in the system and where is it?”

In short, Dr. Martenson is worried about the whole financial system going down.  Dr. Martenson says:

“Yes, I am worried about the whole system going down, and that leads to all sorts of speculation…

Imagine this, we wake up one day, and the markets are not open on Monday.  Oh no, glitch.  Problem.  Then, it’s two days and not open, three days not open.  People are getting worried.  Friday, and the markets are still not open. 

Monday comes, and they say it’s a super big problem, and we don’t know how to resolve it…

They offer you 100% value today in a Central Bank Digital Currency (CBDC) account or you can wait it out and hope it gets resolved, and it might take a decade.”

Dr. Martenson likes gold, silver, land and basically all (clear title) physical assets to protect you from “The Great Taking.”  Martenson has an upcoming seminar with “The Great Taking” author David Webb (and others) to help you to counter the theft that will surely come in the next financial meltdown.

In closing, Dr. Martenson says,

“This has been a series of large amplitude blunders that keep getting bigger and bigger.  ‘The Great Taking’ is the framework built, that just in case all this colossal blundering blows up, Congress and Wall Street flips a coin and you get heads we win and tails you lose.  This is the oldest story in the book.”

There is much more in the 38-minute interview.

Join Greg Hunter of USAWatchdog.com as he goes One-on-One with the founder of PeakProsperity.com, Dr. Chris Martenson for 5.28.24.

*  *  *

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There is lots of totally free information and analysis on PeakProsperity.com. If you want to see the “How to Protect Your Wealth From The Great Taking” seminar on June 15th, click here.

Ukraine’s President Volodymyr Zelensky has increasingly of late lashed out publicly at the proverbial hand that feeds him. He and his top officials have long complained that the billions in approved Western defense aid and shipments have been much too slow to reach Ukraine, giving the superior-armed Russians a clear advantage.

But now as things get more desperate especially in the Kharkiv region where Russian forces are fast advancing, Zelensky is going after President Biden himself. There’s a major Ukraine-backed peace summit in Switzerland set for next month, and it’s looking very unlikely that Biden will attend, leaving Zelensky deeply unhappy.

During a visit to Belgium on Tuesday, Zelensky told reporters that it would not be “a strong decision” if Biden failed to attend the summit, which is to take place June 15-16 outside Lucerne. He went so far as to say it would be tantamount to a standing ovation for Putin.

In a clear slight and back-handed insult, the Ukrainian leader essentially said Biden would be doing Putin’s bidding if he’s a no-show:

“[The] peace summit needs President Biden and so do the other leaders who look at the reaction of the United States. Putin will only applaud his absence, personally applaud it – and standing, at that,” Zelensky said.

But notably, Russia was never invited to send a representative. Given that Moscow is on the other side as a direct party to the war, this means the conference’s aim to secure “a just and lasting peace” appears an exercise in futility. 

It ultimately seems another photo op for Zelensky where he can be seen standing beside the most powerful world leaders. The Kremlin has dismissed the whole thing as but a pro-Kiev PR opportunity. At this moment, Zelensky is desperately urging for his Western backers to approve of using externally supplied long-range weapons to attack directly inside Russian territory.

But what is it that has Zelensky and his more hawkish supporters so angry? Bloomberg had this headline days ago: Biden Set to Skip Ukraine Peace Summit for Hollywood Fundraiser. The story said as follows:

President Joe Biden will likely miss a Ukraine summit next month because it conflicts with a campaign fundraiser in California he’s set to attend alongside George Clooney, Julia Roberts and other stars.

Switzerland scheduled the conference for June 15-16, after a meeting of the Group of Seven in Italy. Several G-7 leaders plan to join but neither Biden nor Vice President Kamala Harris are scheduled to be there, according to people familiar with the matter who asked not to be named discussing private deliberations. President Vladimir Putin wasn’t invited and leaders from other nations are also planning to skip.

The Ukrainian president has also been urging for China’s President Xi Jinping to be at the Swiss summit, seeing in Beijing a powerful country which has sway with Putin – if it can be convinced to back Ukraine’s peace formula.

Lame Duck Biden dumps Zelensky’s peace summit in Switzerland so he can campaign with Clooney and Roberts, former President Barack Obama and late-night TV host Jimmy Kimmel fundraiser on June 15

In December Joe went from AS LONG AS IT TAKES TO AS LONG WE CAN. pic.twitter.com/hgIwzputU0

— Joni Job (@jj_talking) May 27, 2024

Zelensky has said of recent deadly Russian strikes on Kharkiv: “Everything was blown up, children, people, civilians and you cannot answer [Russia]. You receive the satellite images from your intelligence but there is nothing you can do to respond. I think this is unfair. But – and this is a fact – we cannot risk the support of our partners. That is why we are not using our partners’ arms to attack the Russian territory. That is why we are asking please give us the permission to do that.”

Authored by Charles Hugh Smith via OfTwoMinds blog,

When predicting the future, we’re best served by following “what benefits the wealthy and powerful,” as that is the likeliest outcome.

This contrarian sees a strong consensus around the notion that hyper-inflation is the inevitable end-game of nation-states / central banks issuing fiat currencies, i.e. currencies that are not restrained by being pegged to tangible assets such as gold reserves. The temptation to issue (via “printing” or borrowing new currency into existence by selling sovereign bonds) more currency becomes irresistible to politicians and central bankers alike. as the means to mollify every constituency, from elites to the military to commoners dependent on state-funded bread and circuses.

This unrestrained creation of new money far in excess of the expansion of goods and services (i.e. the real economy) devalues the currency, as “all the new money chases too few goods and services.” Gresham’s law kicks in–bad money drives good money out of circulation–as precious metals, fine art, gemstones, etc. are hoarded and the depreciating currency is spent as fast as possible before its purchasing power declines even further.

The Cantillon Effect also kicks in: those closest to the spigot of new money get first dibs on converting the depreciating currency into tangible goods, leaving the non-elites to sweep up the “trickle-down” shreds left as the currency loses purchasing power daily.

The consensus holds that there is no way to stop this decay of purchasing power to near-zero, i.e. hyper-inflation, once it starts. As in a Greek tragedy, the fatal flaw of the protagonist–in this case, fiat currency–leads inevitably to its destruction.

In the real world, things having to do with money tend to occur because they benefit powerful interests. This leads us to ask of hyper-inflation: cui bono, to whose benefit? Exactly which powerful interests benefit when a currency’s purchasing power plummets to near-zero?

The idea here is that there will be pushback if it doesn’t benefit the wealthy and powerful. So either hyper-inflation somehow benefits the wealthy and powerful, or it escapes their control and wipes them out along with the powerless commoners. That raises the question: didn’t the wealthy and powerful see what was coming and couldn’t they have reversed the policies generating hyper-inflation? If not, why not?

There are a couple of different threads to follow here. One is that capital is what matters to the wealthy and powerful because they own the vast majority of it while credit is what matters to the poor, as credit is their only way to acquire a bit of capital to invest in their own enterprise / household.

The poor owe debt, the wealthy own debt: debt (such as a home mortgage) is an asset to the wealthy, who buy the loan for its income stream, while debt is a liability to the commoners that must be serviced out of their earned income.

If wages rise in parallel with high rates of inflation, those who owe debt find their burdens lightened as their mortgage payment remains fixed while their income rises with inflation. Imagine how cheering it is when one finds a once-onerous $200,000 mortgage can now be paid off with a month’s salary due to hyper-inflation.

On the flip side, the wealthy and powerful who own the debt are less delighted, as the purchasing power of the currency used to pay off the mortgage has diminished, effectively robbing them of most of the value of their original purchase of the mortgage. Where the $200,000 they paid for the mortgage could have bought two nice luxury vehicles, the $200,00 they now receive in full payment can barely buy a used clunker.

This raises an interesting question: why on Earth would the wealthy and powerful let hyper-inflation destroy the value of all their debt-based assets and income streams? Isn’t that completely counter to their interests? If so, why would they let that happen?

At this juncture it’s important to draw a distinction between ancient examples of hyper-inflation and the present-day economy. In the declining era of the Roman Empire, the government drastically reduced the silver content in the coinage to generate the illusion that everyone was still being paid in full with only a fraction of the silver contained in old coinage. This artifice was quickly uncovered, and old coinage disappeared from circulation due to hoarding and inflation caused prices and wages to soar.

The difference is back then, the poor owned virtually nothing. Today, the poor “own” debt service: they owe interest and principal on the vast quantities of debt owned by the wealthy, who will lose out when the value of their debt-based assets crash to near-zero in hyper-inflation. Hyper-inflation is incredibly beneficial to debtors with earned income and incredibly destructive to those who own the debt being wiped out.

This leads to a second thread: the wealthy shift their wealth overseas as inflation picks up, wait for the hyper-inflationary storm to wipe out the value of literally everything in their home economy, at which point they return, foreign cash in hand, to scoop up all the best assets at fire-sale prices.

This certainly works on small developing-world economies, but it doesn’t work in large economies such as the U.S. with $156 trillion in assets to convert into other nation’s currencies and assets. In large economies, the wealth of powerful elites is generated by a functioning economy that produces goods and services and maintains a stable currency. Buying a castle and some gold overseas is not a replacement for productive capital that generates income and capital gains.

Wiping out the value of the nation’s currency also destroys its value as a reserve currency and in global trade, two additional disasters the wealthy and powerful would seek to avoid at all costs. If we tote up the winners and losers of hyper-inflation, the commoners who owe debt win as long as wages rise with inflation, while the wealthy and powerful lose out. Given the vast asymmetry of wealth and power, do you really think this is going to happen?

We must also draw a distinction between borrowing currency into existence via paying interest on a sovereign bond and “printing” currency, as some studies have found borrowing currency into existence precludes hyper-inflation, as the interest payments on the rising debt act as a negative feedback loop on future borrowing: as interest consumes more of the state tax revenues, political and financial pressures to curtail runaway borrowing/spending emerge.

What seems more likely because it serves the interests of the wealthy and powerful is interest rates on sovereign bonds soar, enabling the wealthy who sold off all their risk assets such as stocks and commercial real estate to earn a healthy, low-risk return in Treasuries. The central bank is ordered to stop “printing money” and the government cuts spending across the board, leading to howls of outage but since the interests of the wealthy and powerful are at stake, too bad, suck it up, kids, everyone takes a cut.

Risk assets deflate, the purchasing power of the commoners’ debt service stabilizes, and the ensuing deflation only hurts those who didn’t bail out of speculative risk assets at the top and stash the cash in short-term Treasuries. Then, when rates max out, the smart money shifts capital into long-term sovereign bonds and waits for the deflation to send risk asset prices to the basement. Then the long-term bonds can be liquidated for cash, and the deflated assets scooped up at fire-sale prices.

If we ask cui bono, which scenario is more likely: hyper-inflation or a deflationary crushing of risk assets and soaring interest rates? Yes, a bunch of zombie / marginal borrowers will default, and those holding the debt will be wiped out, but all that is foreseeable and can be remedied by selling when everyone is bullish on real estate and risk assets.

As for the commoners, deflating prices increase the purchasing power of their wages. Those with little or no debt will benefit from deflation, as their wages will go farther and they’ll finally be able to afford risk assets once prices return to pre-bubble levels. As for interest rates, we all paid 12% mortgages in the early 1980s and life went on because the loans were modest in size compared to today’s bloated Everything Bubble.

Other than China, it doesn’t appear that global money supply is going parabolic:

As this chart indicates, inflation is tolerated as long as it’s stretched over a century and wages rise along with prices.

When predicting the future, we’re best served by following what benefits the wealthy and powerful, as that is the likeliest outcome. Is hyper-inflation a “solution”? Not to the wealthy and powerful.

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Extending the dismal pace of US economy growth (if not outright contraction) observed in last month’s Beige Book, which was validated by the sharp drop in Q1 GDP growth which tumbled to just 1.6% from more than 3% in Q4 and is expected to slide further to 1.3% tomorrow, moments ago the Fed published its latest Beige Book, which found that while economic activity expanded from early April to mid-May “as conditions varied across industries and Districts”, just like last month, most Districts reported “slight or modest growth”, while “two noted no change in activity.”

That’s the good news. The bad news was far more extensive and worrisome and can be summarized as follows: “Negligible Job Gains”, “Lower Discretionary Spending”, “More Pessimistic Outlook.” Here are the highlights:

• Retail spending was flat to up slightly, reflecting lower discretionary spending and heightened price sensitivity among consumers.
• Auto sales were roughly flat, with a few Districts noting that manufacturers were offering incentives to spur sales.
• Travel and tourism strengthened across much of the country, boosted by increased leisure and business travel, but hospitality contacts were mixed in their outlooks for the summer season.
• Demand for nonfinancial services rose, and activity in transportation services was mixed, as port and rail activity increased whereas reports of trucking and freight demand varied.

Elsewhere, nonprofits and community organizations cited continued solid demand for their services, and manufacturing activity was widely characterized as flat to up, though two Districts cited declines.

Meanwhile, tight credit standards and high interest rates continued to constrain lending growth. And while housing demand rose modestly, and single-family construction increased, there were reports of rising rates impacting sales activity.

Even uglier, the Beige book warns that conditions in the commercial real estate sector softened amid supply concerns, tight credit conditions, and elevated borrowing costs.

There was more cheer in the energy sector, where activity was largely stable, whereas agricultural reports were mixed, as drought conditions eased in some Districts, but farm finances/incomes remained a concern.

Taking a closer look at the two key Fed mandates, jobs and inflation, we first turn to labor markets where the Beige Book made the following downbeat observations:

• Employment rose at a slight pace overall, as eight Districts reported negligible to modest job gains, and the remaining four Districts reported no changes in employment.
• A majority of Districts noted better labor availability, though some shortages remained in select industries or areas. Multiple Districts said employee turnover has decreased, and one noted that employers’ bargaining power has increased. 
• Hiring plans were mixed—a couple of Districts expect a continuation of modest job gains, while others noted a pullback in hiring expectations amid weaker business demand and reluctance due to the uncertain economic environment.
• Wage growth remained mostly moderate, though some Districts reported more modest increases. Several Districts reported that wage growth was at pre-pandemic historical averages or was normalizing toward those rates.

As for prices, it appears that we are on the edge of disinflation if not outright deflation:

• Contacts in most Districts noted consumers pushed back against additional price increases, which led to smaller profit margins as input prices rose on average.
• Retail contacts reported offering discounts to entice customers.
• Many Districts observed a continued increase in input costs, particularly insurance, while some noted price declines in certain construction materials.
• Some Districts observed declines in manufacturing raw material costs. Price growth is expected to continue at a modest pace in the near term.

Finally, and this is probably not a shock to anyone, the report concludes that “overall outlooks grew somewhat more pessimistic amid reports of rising uncertainty and greater downside risks.“

For those curious what individual regional Fed had to say, here is a snapshot:

• Boston: Economic activity was about flat on balance. Prices increased modestly, and wage growth was slow-to-moderate amid stable employment levels. Real estate activity, for both commercial and residential properties, weakened slightly after showing signs of improvement earlier in the year. The outlook became more uncertain for some contacts but remained cautiously optimistic overall.
• New York: On balance, regional economic activity grew slightly. Labor market conditions remained solid, and labor demand and labor supply continued to come into better balance. Consumer spending picked up slightly after slow sales in the spring. Housing markets remained solid, though low inventory continued to restrain sales. Selling price increases remained modest.
• Philadelphia: Business activity grew slightly in the current Beige Book period, up from no change last period. Employment edged up slightly, owing to increased demand and supply of labor. Wage and firm price inflation were up modestly. Existing home sales grew slightly, and new-home sales held steady at high levels. Expectations for future growth edged down and were less widespread for nonmanufacturers but remained positive overall.
• Cleveland: District business activity increased slightly but somewhat more slowly than it had in the prior reporting period. Some contacts attributed the slowdown to interest rates staying higher for longer than anticipated. Consumer spending declined modestly, which some manufacturers said dampened demand for their goods. The majority of contacts indicated that wages, input costs, and selling prices continued to stabilize in recent weeks.
• Richmond: Economic activity in the region expanded modestly this period. Consumer spending rose moderately, overall, which was driven by individuals with discretionary income as lower income individuals pulled back or traded down to lower priced goods. Import activity increased and the port of Baltimore was able to reopen one channel into the port. Manufacturing and nonfinancial services firms reported no change in demand in recent weeks.
• Atlanta: The Sixth District economy grew slightly. Labor markets continued to stabilize; wage pressures eased. Growth of some nonlabor costs slowed. Consumer demand was generally healthy. Tourism remained strong. Commercial real estate conditions were mixed. Transportation activity varied. Loan demand was flat. Energy activity was robust. Agricultural conditions softened.
• Chicago: Economic activity increased slightly. Employment and construction and real estate activity increased modestly; business and consumer spending rose slightly; nonbusiness contacts saw little change in activity; and manufacturing activity edged down. Prices and wages rose moderately, while financial conditions tightened a bit. Prospects for 2024 farm income increased slightly.
• St. Louis: Economic activity across the Eighth District continued to increase slightly since our previous report. The outlook among contacts was slightly pessimistic, which is weaker than our previous report but better than one year ago.
• Minneapolis: District economic activity grew slightly. Employment grew but labor demand softened. Wage pressures were present but eased, while prices ticked up. Consumer spending rose but contacts were cautious, and manufacturing rose slightly. Commercial and residential construction improved slightly, and home sales grew strongly. Agricultural conditions remained weak but saw some positive developments.
• Kansas City: The Tenth District economy expanded at a moderate pace. Household spending rose moderately, driven by increases in hotel stays, outings to restaurants, and auto maintenance. Job gains were modest, yet contacts indicated their employment outlooks were less vulnerable to a deterioration in conditions compared to six months ago. Prices grew slightly with broad reports that strategies regarding price changes were shifting.
• Dallas: Economic activity was flat to up slightly over the reporting period. Some growth was seen in the manufacturing, banking, and energy sectors, while activity in nonfinancial services was flat, and declines were seen in retail sales. Employment levels held mostly steady overall, according to contacts. Outlooks were generally stable to slightly more pessimistic compared with the prior reporting period.
• San Francisco: Economic activity and employment levels were largely unchanged. Prices, wages, and retail sales grew slightly. Activity in services sectors and residential real estate markets weakened a bit. Commercial real estate activity and financial sector conditions were largely unchanged. Demand for manufactured products picked up slightly, and conditions in agriculture were mixed.

More in the full beige book

A fresh CNN report has concluded that Israel used American-made bombs in Sunday’s attack on a refugee tent encampment in Rafah which killed 45 people, including women and children.

The attack on the displacement camp has driven global outrage also given the grim footage and images which surfaced in the aftermath, including of a headless child. Over 200 more were injured. Israeli leader Benjamin Netanyahu on Monday blamed a “tragic mistake” for the attack, while the Biden administration said it did not cross the president’s ‘red line’.

The airstrike happened at a location identified as “Kuwait Peace Camp 1” and resulted in fire rapidly spreading through tents packed with civilians.

“In video shared on social media, which CNN geolocated to the same scene by matching details including the camp’s entrance sign and the tiles on the ground, the tail of a US-made GBU-39 small diameter bomb (SDB) is visible, according to four explosive weapons experts who reviewed the video for CNN,” the report said. 

The White House has throughout the conflict refused to place conditions on US weapons transfers, despite growing pressure even within the Democratic party, though it did pause a single ammo shipment. The New York Times has also analyzed bomb fragments from the attack site, and has come to the same conclusion.

According to more from CNN’s analysis:

The GBU-39, which is manufactured by Boeing, is a high-precision munition “designed to attack strategically important point targets,” and result in low collateral damage, explosive weapons expert Chris Cobb-Smith told CNN Tuesday. However, “using any munition, even of this size, will always incur risks in a densely populated area,” said Cobb-Smith, who is also a former British Army artillery officer.

Apparently the munition triggered secondary explosions and fires at the camp, which rapidly spread and burned out of control.

“The warhead portion [of the munition] is distinct, and the guidance and wing section is extremely unique compared to other munitions. Guidance and wing sections of munitions are often the remnants left over even after a munition detonates. I saw the tail actuation section and instantly knew it was one of the SDB/GBU-39 variants,” former US Army senior explosive ordnance disposal team member Trevor Ball described.

The bombs used in the Israeli strike that killed dozens of Palestinians in a camp for displaced people near Rafah were made in the United States, a @nytimes analysis shows.

w/ @robinnyc7 @heytherehaley @whitney_hurst. Link: https://t.co/VEfMTYHoj6 pic.twitter.com/7nsdboBjOU

— Christiaan Triebert (@trbrtc) May 29, 2024

He even pointed to serial numbers from munitions recovered and filmed at the scene which matched those for a manufacturer of GBU-39 parts based in California.

CNN detailed further: “Two additional explosive weapons experts – Richard Weir, senior crisis and conflict researcher at Human Rights Watch, and Chris Lincoln-Jones, a former British Army artillery officer and weapons and targeting expert – identified the fragment as being part of a US-manufactured GBU-39 when reviewing the video for CNN, though they were unable to comment on the variant used.”

This finding is sure to increase the pressure on the White House, which has vehemently denied it is a party to war crimes in Gaza. On Tuesday White House national security spokesman John Kirby called the Sunday mass casualty attack “heartbreaking,” “tragic” and “horrific” – but still said: “As a result of this strike on Sunday, I have no policy changes to speak to.”

He added in a press briefing: “It just happened. The Israelis are going to investigate it. We’re going to be taking great interest in what they find in that investigation. And we’ll see where it goes from there.” So in the end, the Israeli military is supposedly going to do a thorough investigation of itself.

Authored by Zachary Stieber via The Epoch Times (emphasis ours),

A lawsuit against the Mayo Clinic must move forward, a federal court has ruled, reviving the suit after it was thrown out in 2023.

The five fired workers who sued the Minnesota-based health nonprofit have all plausibly pleaded that their religious beliefs conflict with the clinic’s COVID-19 vaccine mandate, a panel of the U.S. Court of Appeals for the Eighth Circuit ruled on May 24.

The workers in multiple suits, which have since been consolidated, argued that the Mayo Clinic illegally failed to accommodate their religious beliefs, violating Title VII of the Civil Rights Act. Three of the workers applied for religious exemptions to the nonprofit’s mandate and were denied; the two others saw their applications accepted but protested against the requirement that they had to test for COVID-19 weekly.

U.S. District Judge John Tunheim in 2023 tossed the suit, finding that some of the plaintiffs did not prove that they hold religious beliefs in opposition to the mandate or show how the testing requirement conflicts with their beliefs.

The Eighth Circuit’s new ruling is that the judge’s findings were erroneous.

Federal employment law makes it illegal for employers to fire or otherwise take action against employees over their religion. The three workers whose religious exemption requests were denied, Shelly Kiel, Kenneth Ringhofer, and Anita Miller, all said that their Christian beliefs prevented them from accepting COVID-19 vaccination, in part because they oppose abortion and aborted fetus cells were used in the production or testing of the COVID-19 vaccines.

“The district court erred in finding that the plaintiffs failed to adequately connect their refusal of the vaccine with their religious beliefs,” U.S. Circuit Judge Duane Benton said. “At this early stage, when the complaints are read as a whole and the nonmoving party receives the benefit of reasonable inferences, Kiel, Miller, and Ringhofer adequately identify religious views they believe to conflict with taking the COVID-19 vaccine.”

The two other plaintiffs received religious exemptions but refused to undergo weekly testing. One said it “violates her conscience to take the vaccine or to engage in weekly testing or sign a release of information that gives out her medical information.” Both also plausibly pleaded religious beliefs that conflicted with the testing, the panel found.

Judge Tunheim said at one point in his ruling that because many Christians who oppose abortion still receive vaccines, opposition to vaccination based on pro-life beliefs is not linked to religion. However, that view is not correct, Judge Benton said, pointing to a previous U.S. Supreme Court ruling that found that constitutional protection of religious beliefs is “not limited to beliefs which are shared by all of the members of a religious sect.”

The U.S. Equal Employment Opportunity Commission had urged the circuit court to rule in favor of the plaintiffs, in part because of that Supreme Court ruling.

The circuit court reversed Judge Tunheim’s ruling and remanded the case back to him.

Judge Tunheim is an appointee of President Bill Clinton. Judge Benton, appointed by President George W. Bush, was joined in the unanimous ruling by U.S. Circuit Judges Ralph Erickson and Jonathan Kobes, both of whom were appointed by President Donald Trump.

The circuit court also ruled for the plaintiffs concerning the Minnesota Human Rights Act (MHRA), which bars employers from discriminating against workers because of factors such as religion. Judge Tunheim said the law only provides a cause of action for workers who allege disability discrimination, not religious discrimination. That’s not correct, according to the appeals court.

“Due to Minnesota’s precedent of (1) construing liberally the MHRA, and (2) providing its citizens with commensurate, or greater, protections than under federal law, the Minnesota Supreme Court would decide that the MHRA provides protection against failures to accommodate religious beliefs,” Judge Benton wrote. “The district court erred by finding that the MHRA does not provide a cause of action for failure to accommodate religious beliefs.”

Despite Bernstein and Biden demanding the great unwashed realize just how great they have it in America, this morning’s Dallas Fed Services Sector survey offers some insights from actual real people in the actual real world trying to do actual real business… and it’s not pretty.

For two straight years (24 straight months), the Texas Services sector has been in contraction (below zero) with May’s -12.1 print worse than expected. For context, the Great Recession of 2008/2009 also saw 24 straight months of negative prints…

Source: Bloomberg

Respondents in May continued to perceive worsening broader business conditions, with the company outlook index dropping from -1.8 to -5.7, and wage pressures increased slightly.

Additionally, retail sales activity declined in May, according to business executives responding to the Texas Retail Outlook Survey. The sales index, a key measure of state retail activity, fell from -10.4 to -16.4, indicating retail sales fell at a faster rate than during the previous month. Retailers’ inventories increased over the month, with the May index at 2.4.

Retail labor market indicators suggested a contraction in employment and workweeks in May. The employment index fell from -0.5 to -5.2, while the part-time employment index fell 10 points to -7.0. The hours worked index continued in negative territory at -4.2.

Retailers continued to perceive a worsening of broader business conditions in May. The general business activity index remained in negative territory and fell 11 points to -28.8, the lowest index level since December 2022. The company outlook index also fell from -6.4 to -15.7. The outlook uncertainty index increased six points to 15.1.

Source: Bloomberg

So the ‘numbers’ are not pretty… but wait until you see what the respondents had to say…

Trucking is definitely in recession. Truck freight in both volume and price per mile is way down. Our business won’t recover until the industry recovers.

High interest rates and high inflation are ubiquitous among ‘real’ people’s concerns:

• We are seeing a little slowdown, and inflation doesn’t seem to moderate as much as we expected, so we are still seeing increases in input costs and services.

• We see the impact of the high-interest-rate environment starting to impact our customers and customer prospects. Growth is declining, and new business inquiries have waned for key products and services.

• Interest rates and inflation continue to dominate company decisions—our company and our clients and prospects. Costs are high, and budgets are super tight. Therefore, confident decision-making is more challenging for all. Our hiring is on hold while most of our clients continue with layoffs.

• Interest rates remain a concern for my clients.

• This is the worst we’ve seen in the real estate market since the Great Recession.

• Most investors are sitting on the sidelines until after the election or interest rates decrease.

• We have been in a rolling 15-month recession that is starting to brighten up slightly. Our real estate orders have continued to decrease this year, and that is an indicator that the market is pulling back due to the unknown of where interest rates are headed. There is still a lot of money on the sidelines waiting to be deployed, but until the market can determine where the economy is headed, it will stay there.

• Election-year unknowns are creating instability and disruption in our primary markets.

• Interest rates and higher input costs seem to be the key drivers currently.

• The business environment feels quite unstable currently. Service prices for support vendors and supplies continue to increase…

• Higher prices are frustrating our guests. Customer counts are down for that reason…

• Our cost of goods is stable; however, wages continue to have upward pressures because employees are struggling to keep up with rising rents, rising groceries and rising interest rates.

• We continue to be concerned about interest rates.

A commercial real estate developer unloaded on the regional Fed:

…our ability to raise capital for new projects has been greatly impacted by the current interest rate environment, and the value of existing assets has been significantly impaired.

Currently, all levers are in the wrong direction for our underwriting of existing and operating assets and future developments.

• Rents are softening.

• Overall capital and financing costs have substantially increased.

• Materials and labor costs have stabilized but remained high.

• Operating expenses are up (including insurance, property taxes, property management, etc.), and cap rates have increased (due to interest rate increases).

• Equity returns have not decreased, unfortunately.

Therefore, we are currently very far off from economically being able to make developments work.

We have tried very hard to hold on to employees throughout the last two years of challenging times, but we are on the brink of having to make major staffing cuts if we are unable to find some relief from some or all of the above metrics.

We have several (eight in total) development pipeline assets, which include fully entitled, fully designed (shovel-ready) multifamily and mixed-use projects that are permitted and ready to go. However, the carry cost is substantial, and the reality is that we will likely have to sell some to all of our pipeline assets at a discount, reduce staff and wait to start over once the economic environment improves and can support new development.

Our outlook is that the current economic environment will cause many developers to shut down, and only those who can manage to scale back their businesses will survive to this point.

Even though (in Texas) there is a still a large supply-demand deficit for housing, there were many new starts in 2021–22 that are now completing and beginning to lease. Due to the unusual amount of supply coming online all at the same time, lease-up is slower than normal, and even though all the units will get absorbed (i.e., because the demand is still strong), it will be at a slower rate until all of the competing units are leased up.

Once that happens, we believe there will be a two-to-three-year period of little to no new project starts, followed by a lack of supply in 2026–28 that will cause rents to spike and likely support the economics of new developments to resume. We hope that during the next two-to-three-year period, when the economics do not work for development, that materials and labor pricing will also fall, further helping the economics for development.

Finally, three respondents summed-up how bad things are:

It’s an election year, so we would assume no one is going to allow the economy to go down. However, signs are mounting…

and worse…

Inflation is getting pretty scary. We can’t make enough interest on our deposits to cover inflation. We are worried about how to keep increasing pay to our employees to offset inflation.

and worse still…

We are fairly certain that we will be closing our doors and releasing as many as 60 employees in the next few months.

Maybe the president should pop down to Dallas and put these guys straight on just how great they have it…

After two very ugly auction on Tuesday, moments ago the Treasury completed the sale of the week’s final coupon auction when it sold $44BN in 7Y bonds (far from the record $62BN hit during the covid crisis), in what was another very subpar auction if perhaps not quite as ugly as yesterday’s duo.

The high yield of 4.65% was below last month’s 4.716% but it tailed the When Issued 4.637% by 1.3bps, the first tail since January and the biggest tail of 2024.

The bid to cover was also ugly, sliding from 2.481 to 2.427, the lowest since April 2023, and well below the six-auction average of 2.53.

The internals were fractionally better, with Indirects taking down 66.9%, up from 65.1% last month and on top of the 66.8% recent average; and with Directs awarded 16.1%, Dealers were left holding 17.0%, the most since November.

Overall, this was another subpar auction, and while it was disappointing as can be seen by the spike in yields to session highs after news of the break…

… it was not nearly as ugly as some in the bond market were certain it would be after yesterday’s horror show.

Authored by Stefan Gleason via Money Metals,

Miners spend billions of dollars every year pulling precious metals out of the ground. They toil mightily for years on end to produce these stores of value – but then they turn right around and sell all their gold and silver immediately in exchange for fiat currencies.

If you stop to really think about it, this may seem strange.

These businesses quite literally mine real money. But, like nearly every other business or individual, they still seem to be stuck in the fiat currency paradigm.

It takes tremendous risk, capital, and time to find a resource, develop a mining project, and dig up and process the metals. It is extremely difficult to produce gold and silver at a profit.

Inflation constantly pushes up costs and puts pressure on the economics of the miners. They may face tremendous stumbling blocks along the way – from governments, capital markets, indigenous activists, eco-fanatics, union bosses, and many others.

All this underpins the scarcity value of the gold and silver that comes out of the ground – and provides a stark contrast to the amount of work involved in creating fiat money (i.e. none).

Of course, mining companies do need cash to pay bills. But to the extent that it’s not needed immediately, wouldn’t it make sense to hold onto some bullion to preserve purchasing power for future expenses?

Very Few Miners Hold Gold & Silver Rather Than Sell It All

If mining companies believe that gold and silver are better stores of value than fiat currency, then it would seem incumbent on them to hold onto some of their product where they can.

As far as we can tell, though, only a couple mining companies – First Majestic Silver and SilverCrest Metals – have held back a meaningful amount of their production in the past 10 years.

SilverCrest actually does more than delay sales – it has deliberately socked away more than $20 million in gold and silver bullion on its balance sheet, currently representing about 20% of its treasury assets. In other words, these folks eat their own cooking – and plan to eat more.

The company’s president, Chris Ritchie, believes holding gold and silver should become “an additional capital allocation choice that should be considered” for the mining industry.

“SilverCrest has added this choice alongside our other capital allocation opportunities because of the functionality of our product — and we want to give our investors more of what they want while also hedging against some of the risks associated with mining. The option to hold bullion is available for every individual and business that’s trying to keep up with rising cost pressures.”

“The irony is that the gold and silver mining industry spends huge sums of money over long periods of time, and yet we choose to hold fiat currencies as our preferred store of value versus the product we work so hard to get.”

Miners May Struggle to Produce Future Ounces at Today’s Prices

Discussing this idea with Money Metals, Ritchie argued that the cost to replace the gold and silver ounces sold today is likely to be much higher in the future. If companies were to include these realities in their decision-making processes, financial stability and returns could be significantly improved.

“The industry has a horrible capital allocation track record. Poor business, capital markets, and resource allocation decisions have played an enormous role in creating the lack of interest we see in the sector today,” Ritchie pointed out.

The SilverCrest president points to the undercapitalization of the mining sector more broadly to support his point. Precious metals miners represent a fraction of 1% of the global marketable investment index even though they supply a product that is the best store of value in history.

A change in mentality may take time.

One example of the prevailing mindset is when Idaho-based Money Metals reached out to Hecla, a large silver-focused miner that is likewise based in Idaho, seeking support for a 2018 sound money bill pending in the state legislature. The response: Sorry, gold and silver aren’t money.

Idaho was once the epicenter of the gold and silver mining industry. But projects have faced major obstacles in recent decades, and the Gem State’s current liberal governor seems outright hostile to the monetary metals.

In fact, Idaho Gov. Brad Little just last week vetoed a popular sound money bill in order to prevent his state treasurer from holding gold and silver bullion to help protect the state’s dollar-centric reserve funds.

In doing so, Little parted ways with his counterparts in states like Utah, Tennessee, Texas, and Ohio – and sent a terrible message to the precious metals industry in the state.

Excessive Hedging Undermines Profitability, Shareholder Interests

Barrick Gold also provides an interesting case study.

The company’s stock is the same price today as it was 20 years ago. Meanwhile, gold itself is up over 600% in the same period of time!

It doesn’t take a financial wizard to see that you would have been a lot better off investing in the end product rather than the mining process.

In fairness, mining is a tough business and Barrick is a survivor. But it’s also one of many large mining companies that has capped its upside potential by hedging exposure to metals prices via futures markets. Hedging means, in effect, selling production early – well before the metals are even brought out of the ground.

Excessive and poorly timed hedges have destroyed shareholder value over the years.

Even when hedges DO pay off in the near term, they work at cross purposes with long-term investors who buy mining stocks because they want to fully participate in a bull market for the underlying asset.

Short-Sighted Thinking Harms Long-Term Industry Health

Quarterly earnings reporting and other pressures on public companies has led to lots of short-term thinking. The benefits of holding gold and silver shine brighter the longer the time frame in which you evaluate them.

Given the years or decades necessary to discover, build, and produce from a mine, the loss of purchasing power over that journey becomes a significant financial drag that is rarely considered.

Mining companies that sell all their gold and silver ounces today usually hope to replace them at a lower cost in the future. But is that a realistic assumption?

Almost no companies hold gold on the balance sheet.

Retaining some bullion on the balance sheet adds leverage. The returns on ounces held above the ground are not burdened by rising costs. They are not exposed to operational risk. And they reliably earn a better “real” yield over the medium to longer term than cash, CDs, and bonds.

Selling every ounce of precious metals mined immediately, regardless of price, is bad business, and it’s no wonder the mining sector struggles.

A strong case can be made that no company (or person or government entity) should hold cash reserves entirely in dollars given their constant devaluation and inherent risk. But so far there are few other examples of public companies holding gold on their balance sheets. Overstock and Palantir are two of them.

If Miners Hold Back Supply, It Could Positively Impact Price

The gold market is small. The silver market is even smaller.

Whereas demand for metals can surge suddenly, the supply response will take a significant amount of time. The capital required to build new projects is large and capital availability has dwindled to a trickle.

Seizing upon supply and demand imbalances is the holy grail for investors in cyclical industries. Mining companies can add value by retaining production while they wait for up-cycles to mature.

A choice to hold back some of their production from the market – especially when spot prices are below the all-in cost of discovery, development, and production – could also positively impact the prices of gold and silver.

That’s particularly true with silver, which is dramatically undervalued versus gold on a historical basis – but now appears poised to catch up. Higher prices would ultimately improve cash flows, supporting the health of the industry.

Here’s the bottom line…

Mining companies that fail to appreciate that they are literally pulling money out of the ground may continue to disappoint metals investors. But miners that stop being kneejerk “price takers” can expect to be rewarded.