GOLD: It's Next Direction

The election is over except for the crying. When Trump won in 2016, the Democrats cried for four years. They did nothing for America. They are a disgrace to JFKs, Profiles In Courage.

Now, we face four years of Republicans crying. They never read JFKs work. They only read profit and loss statements. The only truth about the party is their initials, GOP - Guardians of Privilege.

This is America. When the people cry for real change, they get labels like Populism. There is little change. This reality has a label. It is called Gridlock. As the dust clears, we will be able to see the tears of the losers. We will be able to see the tears of joy for the winners. We will never get to see the tears of pain by citizens who are suffering due to the pandemic, loss of work and all the repercussions of the two issues. As the lingering effects of the last stimulus fades and new data shows the increase in bankruptcies, a call to end bipartisanship will emerge. This will be nothing more than someone seeking to imprint their name on the national scene. Politicians are already looking at 2022. They have no interest other than ego. Maybe because Congress consists of millionaires and not real people with first hand knowledge of what life is really like in America. This is why I call for a new third political party for the people, the Liberty Party.

Nevertheless, whatever happens from impeachment to stimulus, it will effect the stock market, our economy and currency. The market is fooling themselves under the eye of greed. Reality will hit the market and them like a car skidding on ice at an on coming truck.

I have already provided you with insights to our dollar. My calls have been correct and the dollar will fall into a new range of 86 to 92. This devaluation will be good for gold. In addition, the stimulus talk will only cause more dollars to be printed which is also a positive for gold. By the way, this is the year of the white metal (read silver) according to the Chinese zodiac. Biden will push for another $1400 to make the original talk of $2,000 a reality. The dollar will not only be hit by stimulus, but medical costs for vaccines, for other stimulus like infrastructure and projects for reelection by politicians, especially Republicans. They will sell their vote in private to democrats for legislation. After last weeks disgrace by Trump's followers, people will forget that the "Donald" even advocated the $2,000 check. 

The real important aspect will be the timing of whatever comes forth as stimulus. The Democrats will seek impeachment again. They want to put the nail in the coffin on Trump. The Republican politicians will be looking at 2022. They will do nothing for America unless they can spin some positives for themselves. They want Biden and the Democrats to fail. It is like the Eagles song, Lying Eyes. 

If the stimulus talk is pushed back until after the inaugural, the timing will be too late. The whole event will drag out until spring. By that time, we, at Evolution see a "M" economy. The pattern is already appearing. The first leg down was last March. Then, we had a quick recovery after the lockdown. The present second wave is casting doubts about the recovery. The election results will raise hopes. Reality will cause everything to crash. This completes the pattern. How long it lasts can only be told as it happens. 

Bonds...

are saying that a good stimulus plan is fading fast. Price levels suggest that inflation is awakening. The real trendline will appear by the end of January. By that time the number of bankruptcies will be alarming. Unemployment has fallen to 6.7%. It will probably drop even further due to the holiday season hiring. When the layoffs start hitting over 750,000 each week by the end of January, the trendline will have its new direction. In addition, so will the price of gold.

Gold Trendline...

had been in correction mode since 7th of August when gold hit its new all-time high of $2062.50. It found a resistance bottom at $1850. Last week this down, trendline was broken. Last Friday, it surged upward on strong volume to $1951.70. Gold got confirmation with GDX. GDX rose from the corrective low of $36 to close at $41.42. Yes, they whacked god again last week, but when the knowledge and reality of spending and taxes and more spending hits the news, gold will soar. Gold is forming a "W" pattern.

2cd. Opinion

There are other ways to look at gold. One can see the miners are rising. This is harmony in the sector. There are the historical references like the price of one ounce of gold to the Dow Jones price. When the ratio is one, gold is fairly priced. Given this aspect, the price of gold has a long ways to go. Then, you can view charts with inflation adjusted price? Then, you can look at the relative evaluation of gold to the price of gold miners? You can relate the price of gold to the Federal Reserve balance sheet? You can also see how the ETFs in gold will raise the price of the miners when the gold price rises. By the way, the ETFs have more gold under their portfolio than ever before. All of these are check marks for certain people. These are stat guys. They are like football bettors who want to know how a team does on grass as opposed to artificial turf. I like some of their studies, but our Economic Evangelist is more practical. He uses this study.

!965 Ford Mustang...

sold for $1995. The price of gold that year was $35.12. Keep in mind the price of gold was suppressed until Nixon's move to drop the gold standard in 1971. The Dow Jones was at 969 in 1965. You could also buy a Hershey candy bar for .05 cents. Today, that candy bar costs more than one dollar. Inflation caused a 20x price increase. Inflation shows the effects of devaluation. Devaluation's chief cause is by excessive printing. Stimulus is printing. Our model uses the previous high of gold. This was in 1980. It reached $850. A new 1980 Ford Mustang cost $5338. So, if we use that price when gold was free to trade on the market and divide it into the cost of a 2021 model, inflation points to 5x. If we multiply $850 by 5x (times), we get a price for gold. It is $4250. I don't think fiat governments will let that happen. They will use all their power to intervene. However, they cannot stop gold completely. Continue the exercise.

A new 2021 Ford Mustang can be purchased for $26,900. However, a top line version costs over $74,000. How about those numbers for the value of the dollar that is destroyed by inflation. Inflation also acts positive for gold. Gold never really loses its value. By using this example. we expect gold to rise to a minimum of $2650. and as high as $3700.  

As stated in previous pieces, we like four gold miners along with gold or silver coins. One in the group can be replaced by a fellow miner in Australia. Newcrest Gold is good, but Kirkland Lake Gold (KL) could be better. We also like Barrick Gold (GOLD), Wheaton Precious Metals (WPM), and Argonaut Gold (ARNGF). Dear Reader, at least, American readers, if you make out well with gold, buy an American car. Maybe the electric Mustang? It is beautiful. Peace.

2021 Forecast

 "A point is reached where the trend is reversed and becomes self-reinforcing in the opposite direction."

- George Soros

What Georgie boy is talking about is what people perceive to be true. The stock market's truth is that central banks and in the US, the Federal Reserve will have the market's back. Back in the day, when you had unemployment offices, people could see immediately the state of the economy. In fact, they even found themselves on the line. Today, computers help mask the state of the economy. However people get their information today, the one central theme is central banks will keep interest rates low to help housing, business and consumers. They will also buy bonds from the market. It does not matter whether the issuing firms are worthy of purchase. By the way, a similar report says that 19% of loans are not being paid, but the firms have continued to exist due to the last government stimulus.  This is a market condition tell. We, at Evolution have been adding the pluses and minuses of our present economy. This is what we see...

December's Claims:

Dec 4th. = 712,000, Dec 10th. = 835,000, Dec 16tn. = 751,000, Dec 23th. = 803,000 and Dec 31st. = 787,000. This equals about an average of 780,000 unemployment claims per week. I remind you that during the Christmas selling season, retail, as well as, all delivery and warehouse companies hire seasonal help. To have 3.88 million file for claims during this season is a tell. The post Christmas time is also busy with returns. This will end around the time President-Elect Biden has his inaugural. If we are right, we expect a huge spike in unemployment claims around that time. Biden will push for a new stimulus program. Politicians forget the truth of science, "For every action, there is an equal reaction." Stimulus is money printing. Every dollar that is printed lowers the value of the currency. One can see this very clearly in the recent rally in commodities. When the dollar declines, prices rise, especially in commodities. If you recall in past pieces, we posted a report by the St. Louis Fed in the 1980s. It stated the lag time for new money to circulate is around 12-months. The Fed knows this. They will let inflation ride with the gamble that they can control the narrative until the spike in inflation abates. This would indicate that inflation will appear, but for how long will be the point of contention. There is a new debate about this effect and report. Harry Dent says the Fed's money printing is an attempt to fight deflation. Harry is a leader in forecasting an economy based on demographics. He has a simple truth and it leads to a dual tell. The first is that we are in agreement in the economies outlook and even the timeline, but for different reasons.

2cd. Opinion

Harry Dent's theory is a reflection of the birth to grave cycle. When babies are born, diapers are selling. Teenagers drink soda and eat chips. When one reaches twenty or so, cars are flying off the lots.  By the time thirty hits the calendar, people look to purchase their first home. This ignites the real estate cycle. As time moves along, some get second cars and vacation homes as well as insurance. The last years might include some travel, but liquidation appears. This is where we are in his cycle theory. One no longer needs a second or vacation home. Medical concerns begin to rise until the call comes to the funeral parlor. According to Dent, our demographics point is the call to the morgue. We are not selling diapers, sodas, cars, real estate, whatever. The lack of buying will cause overpriced products to die in store. The overvalued stock market will crash by 40% in late April says Dent.  

Our View

We, at Evolution use a hybrid of fundamentals as well as charts. The charts are at highs, however there is a huge gap with high volume last March. This needs to be tested. This is the first point. The next is a fundamental point. It is the retail catastrophe due to the internet. The mall is dying by a thousand cuts. The last stimulus has prevented many firms from declaring bankruptcy. The airline industry has lost over $35 billion in 2020. Millions of renters were saved by the moratorium on evictions as well as homeowners with foreclosure. The stock market is at highs, but the market has many deceptions. The Dow is manipulated as well as the S&P 500. For example Tesla is added. Apple gets an oversized percentage of the theory. In the meantime, there is no longer 5,000 firms listed. Where did they go? Some have merged, but most are out of business due to imports. I know that I have bounced around with details, but getting back to stimulus and the consumer. When someone has a job and spends in their region, this is the movement or velocity of money. The better the economy, the higher the rate. Today, the Fed's low interest rates barely moves the velocity of money. Consumers need money for basics like food and shelter. The rate of velocity is minimal. This is a serious flaw in our economy. This is another tell.  

Oil

This is the most important commodity. When people stay home, they do not need their vehicle. Gas stations sell less gasoline. Stores sell less product. Keep in mind that plastics use a lot of oil. When oil declines in price, airlines save money on fuel. This is good unless no one is flying and no one is flying due to the pandemic. The market sees hope in the vaccine. They look beyond the day-to-day problems like the low rollout of vaccinations. In addition, they will give the new administration a honeymoon period. The virus will cut short the expectation period. Biden's picks are all old cronies. You cannot go back in time. Government needs new thinking and direction. The Democrats won't help and the Republicans won't help the democrats. Gridlock won't help Americans. The outlook is bleak. Back to oil, it acted like the canary in the coal mine. It points to a shrinking economy. We have more oil than we need. The whole industry is being challenged by climate matters and electric cars. Not good as the industry offers high wages to an economy suffering from the loss of middle-class jobs. Another tell.

CORVID-19

The virus news seems to get worse and worse. It will be over soon. It is always darkest before dawn. The market keeps a positive look in this respect. However, it fails to see the real effects to Main Street. We lost almost four million jobs in December which is usually a job creating time. The downturn in jobs that the end of January brings will begin to enter the psyche of the market. This point will grow with every bad news revelation. The point of reversal that Soros talked about will enter into the equation. The Ides of March will assassinate many a portfolio. The crash will follow. 

Odds and Ends: December 2020

 Time keeps on moving...no one foresaw the financial setbacks of this year. The market keeps moving in an uptrend despite all the dangers. Since March, unemployment claims have averaged over 900,000 every week. If not for Payroll Protection Program (PPP), free government loans and forbearance edicts, the economy would be at a standstill and homelessness would be rampant.

One reason why at Evolution, we feel the market keeps hitting new highs is due to cannibalism. When enough shorts appear, bigger funds attack their position by buying. The fear factor is the same whether $100 or $100 million. The old saying is true, "The market can behave irrationally longer than you can remain solvent."

Over 5,000 Pages...an counting...

The would be, could be, new stimulus bill hit a political snag. President Trump has begun his 2024 campaign by demanding citizens receive $2,000 each under the bill. President-elect Biden made his response commercial that he will use for his campaign. It gives him an excuse if his first term fails. He blames Trump for a weak vaccination rollout, passage of stimulus and an overall poor economy. The bill is over 5,000 pages. Dear Reader, can you read a boring, legal document that is that long in less than five days? This is another example of what is wrong with our government. This bill like almost every act, allows pork barrel. A bought off member of Congress puts in pork with this known point: I won't vote in agreement unless you add my addition. This is why the defense bill will pass because too much money influences our weak minded politicians. We will never have peace until we rid ourselves of the warmongers. They waste lives and resources. We could those riches to build a better nation In a related aspect, we had a peek at the previous bill. It had the old...

3 - Martini Lunch...

in it. It provided tax free money for the PPP, this would give small business a negative tax rate to which the IRS says is illegal. The "Double-Dip" a.k.a. George Costanza of Steinfeld fame is the way that I dip my chip, "I dip. I bite and then, I dip again." It also allows firms to endanger workers without the fear of a lawsuit. My eyes are getting stressed from working on my computer/screen. Is there anything in the bill about that?

Apple 

is finally getting smart about their product. They have sent a redirection in the company. Now, they will build their own chips, modems, etc. In this way, they can prevent copy-cat products by competitors. This will put a crimp in stealing intellectual property unless they continue to make their products in China. Not all the news on Apple is positive. They lost their lawsuit versus Corellium over the "Virtual I-phone."😢 😡.

In a related aspect, Video Curl says Nvidia and AMD will not be able to meet demand until the 2cd. quarter of 2021.   

New Radar

by using light. Company called Luminar is advancing the technology and system.

Nuclear Fusion...might not only be possible, but it could be coming which adds another long-term problem for oil firms. In a related aspect, watch uranium mining firms. They are popping. Why, you ask? The US Senate Committee has approved a bipartisan bill aimed at establishing a US national reserve of uranium.

Fed Report...

by the St. Louis Fed back in the 1980s stated that it takes at least 12-quarters in lag time to reflect changes in money policy in the money supply. With all the printing and probably, more to come, M-2 points to gold rising to $2400 in 2021. In a related aspect...

New Data...

on housing points to serious problems within the industry. Home owners have been hanging on and many with the help of the forbearance rules. This ends in March 2021. In addition, the moratorium on evictions as 11.4 million households owe over $6,000 each. Collectively, this amounts to $70 billion. Moody's Analytics estimates that any new stimulus will not reach these people in time. Not good.  Many have not made payments with these protections. However, the payments can be ballooned along with fees. To me, this spells another foreclosure problem. Just like the crisis in 2008 which led to less home ownership and more rentals, this will push the US into a rental nation. The growing list of consumers with bad credit won't help our economy. The data points to the rule of real estate: location, location, location. The following five are already showing signs of strain.

*Miami = 12% of all loans are delinquent. *New York = 11% of all loans are delinquent. *Las Vegas = 10% of all loans are delinquent. *Houston = 10% of all loans are delinquent. * Chicago = 8% arrears.

As time moves to the new year, maybe we can find some solace in the Chinese Horoscope.  I felt a negative vibe at this time last year when 2020 was called the Year of the Rat. This was suppose to be good under the Chinese predicable history. At that time I reminded readers that a rat is never good in US culture. Next year is the Year of the White Metal OX or Bull. No wonder the stock market is rising as it always looks ahead. The Ox is hard working and resilient. These are good American traits. Let's hope for the best and keep in mind, the white metal is silver. We, at Evolution like that.     

Truth in Comedy - Where are you, Bud and Lou?

I could talk about the many triangle patterns in the charts. They are generally a continuation pattern. This fits our forecast that seasonality will prevail in the marketplace until January. I could mention that we see the worst possible outcome for retail, especially small businesses. All those onloaded shipping containers will eventually be unloaded. The problem is timing. When retail receives the merchandise, the Christmas buying season will be over. There is also the return aspect for all companies, whether online or brick and mortar. In both cases, seasonal layoffs will result in dissatisfied consumers. Many firms will lose money due to inflation, labor shortages and product shortages. Our call for a market correction in January is looking better and better. So, let us hope that we are wrong and enjoy each other while we can. However, our nation needs someone to challenge both political parties and their "yes-men" who run our government agencies. The following replay is an example of what I mean. Enjoy...

As promised, a Christmas present to you. It is from the 1930s. The comic genius of Abbott and Costello was true then as it is today. Politicians came up with this lie for many reasons. You might want to forgive them under one aspect in that it is skewed for the positive. Today, it is out and out corruption to hide the fact that the best jobs along with their wages in our economy have been outsourced to foreign lands. Politicians are bought! Producers are free in our free society, but government should be looking out for the welfare of the nation. Tariffs should have been the standard reply for any outsourced product. It didn't happen because politicians are weak, bought off, spineless souls who have no conscious. This is what is wrong with our democracy. Now, forgive my rant and enjoy this truthful, comic genius.

Costello: I want to talk about the unemployment rate in America.

Abbott: Good subject. Terrible Times. It is 7.8%.

Costello: That many people are out of work?

Abbott: No, that's 14.7%.

Costello: You just said 7.8%.

Abbott: 7.8% unemployed.

Costello: Right - 7.8% out of work.

Abbott: No, that's 14.7%.

Costello: WAIT A MINUTE! Is it 7.8% or 14.7%?

Abbott: 7.8% are unemployed. 14.7% are out of work.

Costello: If you are out of work, you are unemployed.

Abbott: No. Government said you can't count the "Out of Work" as the unemployed. You have to look for work to be unemployed.

Costello: BUT THEY ARE ALL OUT OF WORK!!!

Abbott: No, you miss the point.

Costello: What point?

Abbott: Someone who doesn't look for work can't be counted with those who look for work. It wouldn't be fair.

Costello: To whom?

Abbott: The unemployed.

Costello: BUT ALL of them are out of work.

Abbott: No, the unemployed are actively looking for work. Those who are out of work gave up looking, and if you give up looking, you are no longer in the ranks of the unemployed.

Costello: So, if you're off the unemployment roles that counts as less unemployment?

Abbott: Unemployment would go down. Absolutely! 

Costello: The unemployment just goes down because you don't look for work? 

Abbott: Absolutely, it goes down. That's how it gets to 7.8%. Otherwise, it would be 14.7%.

Costello: Wait! I got a question for you. That means there are two ways to bring down the unemployment number.

Abbott: Two ways is correct.

Costello: Unemployment can go down if someone gets a job? 

Abbott: Correct.

Costello: And it can also go down if you stop looking for a job?

Abbott: Bingo.

Costello: So, there are two ways to bring unemployment down, and the easier of the two, is to have people stop looking for work.

Abbott: Now, you're thinking like an Economist.

Costello: I don't even know what the hell I just said.

Abbott: Now, you're thinking like a Politician.

You can clearly see that nothing has really changed since the Great Depression. At one time you could argue that the Democrats were for the working people, but that is no longer true. It is why I suggest that we need a new third political party that is for the people. The "LIBERTY PARTY" would promote the general welfare and end all foreign entanglements. 

The next short piece reveals many problems in America today, but within it is hope, just like the Christ-child offers hope at Christmas time. Jacob Blake, a black man, was stopped by police with his three children in the car. The stop became a tragedy as Blake was shots even times in the back. A riot followed. His mother, Julia Jackson said, "Her son would not be happy with the damage to the community or by the actions of its residence." She continues by saying that she is praying for healing. She goes on to say, "We are the United States, but we are losing our ability to be united. A house against each other cannot stand!" She is praying for the police, the community and the nation. She ends in tears by saying, "America is great when we behave greatly."

She is a reflection of love and this is God's gift to us at Christmas. MERRY CHRISTMAS, PEACE.  

OIL: Into the First Quarter

 If you haven't notice, oil is gushing. No, not a new discovery per se, but by the stock market. To remind you, the market is a forward gage with an eye that envisions six months ahead. I know many have lost a job or work from home. You won't get to see the man on the ladder at the gas station. He is changing the price to a higher number. If you recall, last May, the oil contract reached a multi-year low of $10 per barrel. At that time, the gas station attendant could not find his ladder to lower the price per gallon. He always has this problem. Nevertheless, oil passed its 50-day moving average and 200-day average on the daily chart. It is approaching its 200-day on the weekly chart. Resistance for light, US crude is $50 and for global, Brent, it is $58.67. Last Friday, US crude closed at $46.57. The question that you may ask is why and why now?

EIA

The Energy Information Administration data shows that the global consumption of oil has reached 96 million barrels per day. This is six million below the world usage prior to the pandemic. In the US, we have lowered our imports and at the same time, generated around 12-million barrels of domestic production. With that said, the market sees US production falling as small, domestic firms go belly-under due to the effects of the lockdowns and virus. This is not a problem because other firms could ramp up production to fill the demand. What the market is looking at is a return to economic normalcy. They see the vaccine. They see other nations, especially Asian, resuming their economies. They see more auto sales in emerging markets. They brush off the introduction of electric cars due to many reasons. The cost is high. The reliability is poor. Winter works havoc on electric vehicles. The battery question has not been answered. In addition, the infrastructure to service batteries and long distance has not been answered. The combustion engine still has years to go.  

This is why oil is trending up. There are other factors that is helping the outlook and price.

King Dollar

Last March, when the initial fears of the virus became known, the US dollar touched $104, as a safe haven. Then, excessive money printing along with the economic slowdown, revealed structural problems. The dollar began a long decline. It touched its yearly low last Friday at $90.92. The charts indicate that the dollar will find resistance/support at $88. When the dollar declines in value commodities cost more. The market sees that too.   

2cd. Opinion?

If you consult Dr. Copper, you will find his fees are up. Last March, the pandemic caused panic in the industry. The price per pound hit a yearly low of $2.00. Now, it is $3.53. The dollar declines, commodities rise. 

How about Iron Ore? Last March, it declined to $615 per ton. Now, it is 923 per ton. You can look for gold to feel the effects of this momentum. We have pointed out many times that fiat, central banks hate the strong currency of gold. However, they cannot deny the obvious. When the dollar declines, commodities rise. Prices are also rising for aluminum. Beverage and can goods are facing higher costs due to the higher cost for aluminum. This begs the question, can inflation be far off?

Getting back to oil. The market will reevaluate the price and outlook in January. If the vaccine gets results and it is received favorably, this will strongly lead to higher oil prices. Always keep in focus, the price of the US dollar. If the downtrend continues and new stimulus is added, oil will continue to rise to its level prior to the pandemic. You have an oil stock? You can help? Get out and shop! Enjoy the holidays. Peace. 

Different Numbers, Outlook

 Last week the data on unemployment claims and the governments report on the percentage of the unemployed were in direct conflict. I have been keeping a tab for the last six weeks on the tally by states. It does not jive with the Bureau of Labor Stats (BLS). One of the differences can be explained by the way and who are counted by the government. What we have here is the other side of the "Prodigal Son" story. In this version the father kicks out the son with the words to mother, "He is now, somebody else's problem."  Dear Reader, when you apply for unemployment benefits, you only receive them for around six months. In deep recessions like this pandemic, states will extend the dole for three months. Do the math! This recession started in March. One begins collecting, if that person was fortunate to get through to apply, by April. The six month period has ended. The extension is over or ends this month. Another report reveals 12 million Americans will lose their benefits on the 26 of December. Do you know what happens then? These people are no longer counted in the unemployment figures, "They are somebody else's problem." This drives down the unemployment figure. Wall Street knows this, but they live in a world where they just wait for stimulus to keep the market bouncing higher. They forget that if no one has any money, stuff just sits on the shelf. Then, the store closes. This is what is happening, stimulus or no stimulus. Oh yeah, the government does not count self-employed people, ever! If you want a true picture on how deceitful the government unemployment numbers are, I suggest that you search for the great comedy team of Abbot and Costello. As a Christmas present, I will transcribe their routine. It is very funny and so true, it is scary. By the way it was done in the 1930s and it is still accurate. By the way, the government reported that unemployment fell to...

6.7%.

The BLS admits that it presents a "brighter" picture of the economy by using calculated surveys and rules that are in place. The above percentage equates to 154.9 million people in the labor force out of a population of 330 million. This is their picture. Here, at Evolution we tallied a different number with a bleaker outlook.  

Six Weeks Ago...

the states tally for unemployment claims was 892,000. The week after that another 837K filed. The data on new jobs for the same week was 661K were filled. My old school math says 231K more people were unemployed than jobs created. The government reported that unemployment fell to 7.9%. On 12 November, the unemployment numbers showed another 709K filed. In the same week, Standard and Poor's released a report that predicted 12.5 % of US companies will default. This equates to $200 billion. The following week another 820K filed claims. The month ended with another 778K new claims on the 25th of November.

On the 4th of December another 712K filed new claims and 245K new jobs filled. To the thinking of the Economic Evangelist, the total comes to 4,685,000 claims just in the past six weeks. We all know that there was not 5 million new jobs created. Can you see my point about the BLS stats and our government in general?

Other Worries...Hard Winter

The virus second wave is doing damage that cannot be cured by a vaccine. We found that 17 million are behind in either rent or mortgage. In the next two months, 5.6 million could and most probably, will be evicted. The moratorium on evictions ends on the 31st of December. Owners of those properties are also falling behind in their payments. This is the disconnect between Wall Street and Main Street. One can get a clearer picture by looking at the last poverty release by the BLS in 2019. The report showed that 34 million or 10.5% of the population was below the poverty line. I think this figure will double for 2020. I get my calculations from seeing extended lines at food banks across the nation and the total number of people collecting food stamps or SNAPS as it is now called. Currently, there are 43 million on the rolls...and rising. My math says this is over 13%. By combing the claims filed and people collecting food stamps, I equate the unemployment figure to be 20%. Ouch! No wait! Double ouch!!

2cd. Opinion?

The people at Bank of America agree with me that the BLS numbers on unemployment are way too low. They do not give their projection. Then, there is this study by Sensormatic Solutions. They show that there are approximately 110,000 stores in the US. By the end of the first quarter in 2021, they see 25,000 will close their doors. There are about 1,100 malls in the nation. They say that half will be gone by the end of 2021. So far, foot traffic is down by 41% in malls during this shopping season. 

How can you shop in any of the following cities to which reflect severe unemployment and poverty rates? This is a small list of locations under poverty duress.

*Reading, Pa. = 31.4%, Jackson, Miss. = 24.4%, Fresno, Ca.= 33.2%, Flint, Mi.= 33.6%, Albany, Ga.=38.2%, Springfield, Ma.= 27.4%, Toledo, Oh.= 29%, Buffalo, N.Y.= 23.4%, Las Cruces, N.Mex.=25.8%, Muncie, Id.= 29.5%, Banger, Maine = 19.8%, Monroe, La. = 34.6%, Cape Girardeau, Missouri = 27.8% and Springfield, Ill. = 23.8%.

With scary numbers like those that are rising and spreading, we need a government that starts to protect American workers and not one that grumbles about government positions based on diversity. Our founders wrote it into the constitution, "Promote the general welfare..." I say, "Start promoting!" Peace.  

Gov't in 2008, Fed in 2020

The recession caused by the financial crisis in 2008 revealed many things about our economy. The plan by our government to address the many issues showed their lack of leadership, poor vision and courage to address the loss of manufacturing due to trade policies. Their resolution was to increase debt and use tactics employed by socialist nations whose corporations are really government sponsored entities. The list is like songs on an oldies radio station. Do you recall...?

*TARP: Troubled Asset Relief Program which provided (gave) $700 billion to banks and another $100 billion in pork.

*TAF:    Term Auction Facility or TAF-fly. This made toxic mortgages an asset and could be used as collateral.

*TALF:  Term Asset-Backed Lending Facility or son of TAF-fly. This was for student and auto loans.

*CPFF:   Commercial Paper Funding Facility. Corporations piggy-bank.

*AMLF:  Asset-Backed Money Lending Facility. Used to cover problems in money market funds.

*TSLF:   Term Securities Lending Facility. Used for bank swaps and bad mortgages for Treasury.

*SLF:     Special Lending Facilities. Bailout for firms like AIG, J.P. Morgan, etc.

*PDCF:  Primary Dealer Credit Facility. Help for broker/dealers, non-bank categories piggy-bank.

If you look closely at the various programs, it has the Federal Reserve written all over it. The unwritten law that the market knows is this: The Federal Reserve is socialism for the banking industry. It allows banks to "bank" the profits and socialize the losses. The first modern proof of this was the Long-Term Capital Management crisis back in 1998. The firm used math programs to trade. They had over $127 billion in house. They were moments away from collapse. The Fed stepped in and provided (gave) enough dough to bailout the firm and further damage to the market. In state sponsored nations, this provision is a given by the government. This is not suppose to happen in a free capitalist economy. We no longer have a true free market. This is why the disconnect with the recent market rally to the main street economy with faces multiple bankruptcies and job losses is happening. The Fed will back corporations who spend recklessly and borrow foolishly. The real internal problem is the excessive printing by the Federal Reserve. The only reason that the value of the dollar has not declined severely is due to all nations doing the same thing with their currency. However, in the US the economy is mostly service orientated. This is code for low-wage. When money circulates within a region, the word to describe this action is the velocity of money. Low wages curtails the velocity of money. This is evident in stimulus. The effect wears off like a drug dose to an addict. It takes more and more with a higher dosage to provide relief. Our economy is at that point.

Meanwhile, the distinctions between government and the Federal Reserve is becoming less and less. If you noticed, government appointees like Janet Yellen in the new Biden administration or those in the Trump service, the line is blurred. Then, there are these Federal Reserve emergency programs in 2020 to keep the game going for the status quo. They do nothing for main street except lip service. You can compare these to those of 2008. Keep in mind that the following are only classified as emergency programs. They have so many and so much power, to which I say again before its too late, End the Fed!

*Repurchase Agreement. Buy your junk.

*Money Market and Mutual Fund Liquidity. Provide money for market stability.

*Main Street Lending Program. Funds went to big firms. All spent (used) at the moment.

*Discount Window Borrowing. Cheap money for banks.

*Central Bank FX. Used for liquidity swaps.

*Payroll Protection Liquidity Facility. This program just expired...for the time being.

*Primary Dealer Credit Facility. Continuation of 2008 program.

*Commercial Paper Funding Facility. Continuation of 2008 program for corporations, a.k.a. piggy-bank.

*Corporate Credit Facility. Buy your junk loans.

As you can readily see, our economy is totally bogus. The real issue is taxes as tariffs should be put in place to drive corporations back into the US. We need to stop the shrinkage of the middle-class by returning to a producing economy. Service jobs are for high school kids to earn enough to go to college and not to exist or raise a family. This concept is classified as protectionism. All nations employ it, but whenever the US attempts it, it receives backlash. It will take real courage and leadership to which at present, our government lacks. Hope your holiday was enjoyable. Peace.