2023: Near-Term Forecast

 Some wisdom for the new year and all holiday seasons...

- I am not alone at all, I thought. I was never alone at all. And that, of course, is the message of Christmas. We are never alone. Not when the night is darkest, the wind coldest, the world seemingly most indifferent. For this is still the time God chooses.

- Taylor Caldwell

A hundred years ago, two things happened that I love. Yankee Stadium opened and my mother was born. It gives me a positive feeling for the number 23. It didn't hurt Michael Jordan either. However, the number does not mean anything for the new year. The two biggest problems could get worse. We can blame the Federal Reserve for the one that directly effects all of us, Inflation. The other is due to the ego, paranoid leader of Russia with his Ukraine War. 

These two aspects will be the cloud that makes the night darkest and the wind coldest. We told you in past pieces that Milton Friedman hit it on the nose, "Inflation is always and everywhere a monetary phenomenon." It is no wonder that he is never mentioned by economist. He spoke the truth! We, at Evolution can translate him for you in laymen terms, "It's the printing press, stupid!"

The Fed multiplied our currency by four times. It takes time for the effects to effect our lives. It is here, now. The dollar has stayed high due to the hike in interest rates. This has caused a chain reaction around the world because a higher dollar causes inflation in other currencies. They too, have raised their rates, but they did not want to pursue this action. The US is not liked for this response and undercurrents are in progress to replace the world's reserve currency away from King Dollar. If that happens, life in America will get increasingly harder. Homelessness, crime, civil unrest and unemployment will become rampant. It would not be pretty and it could last for a long time. The world will miss using the US as a dumping ground to preserve their economies. The Founders of our nation understood the dangers of fiat. We can only hope that some form of a precious metal is reintroduced to our currency. That will provide stable prices and stop inflation. We need other things too like respect for workers, curtailing outsourcing and creating better paying jobs to stabilize society with a stronger middle-class. The poitive effects by achieving those goals could fill a book. Sadly, not now, not today.

Market...

is showing a clear message, the elevator is going down. For the year, it touched bear market levels, but lifted just outside the zone. We, at Evolution see the market testing the March lows of 2020 which was the middle of the pandemic. If the elevator goes straight down, this says the market could bottom. If it acts like it has been acting with some ups and downs, we will be in dangerous waters. The market will react to whatever the Fed does with rate hikes. Keep in mind that $1.7 trillion in bonds are due in 2023. Those buyers will face much higher levels of interest to survive as a going concern. We have serious doubts. We see delinquencies which leads to bankruptcies which leads to unemployment. All things are connected is the theme of our unpublished work. It will be apparant in 2023.    

Oil and Gold

Oil is always front and center to life. The Fed may not count it in inflation, but we know better and we do. Prices have declined due to various factors. China shut down. Any upsurge will cause prices to rise. Europe needs to establish an energy policy for its people and future. However, drilling and supply take time. Many other nations had lower demand and the pandemic is one of the reasons. Demand will rise. At the moment, supply is stronger than demand. This equation will change. This says inflation is not going away. 

We follow the founding fathers. We believe in a strong currency. Looking at gold, the charts show that it bottomed in 2015. We had a rise to $2089 in 2020. Then, it retraced to $1600 level. Gold attacked the high, but it could not pierce it. Not good. Gold did a retest of the $1600 level. It should eventually rise to $2500-2650 level. Have some patience! 

Stats and Numbers

The government is full of them. Keep in mind that the political party in power chooses people that can play a spin on stats and numbers. Milton Friedman is a perfect example. Speak the truth and doom your career. The opposite is the phony Alan Greenspan. When he was young, he wrote a thesis defending gold. When made the Fed chairman, he did everything to debase gold. This is life in America. Meanwhile, the present head of the Fed says the economy is strong with stats and numbers as well as employment. We already stressed to you, Dear Reader, the labor participation level is below the1980s. We suffer manipulation. The market is under the same influence, but like we stated in the past, if inflation is over economic growth that is stagflation and that means you are in recession.

You can site all the stats and numbers you want, but Tesla is down 65% for 2022. We say, it has a long way to drop further when you consider this aspect. Tesla's market cap is greater than GM, Ford, Toyota and the old Dodge combined! They are not alone. Shopify and Palantir Teck come to mind. The former (SHOP) was $180 last year and now, $34 as of last Friday. The firm says it makes over $1 billion in revenues, but they do not show a profit. This tells us that they do not know what they are doing. The latter (PLTR) was $45 last year and last week it fell to $6.42. Ouch! That should be your warning for 2023...Peace.