2024: Year of Issues

Population

The new year will ring with a big, round number concerning global population. There are 8-billion of us. At the same time, agricultural land is being threatened by expanding local population, development, taxes, inflationary prices, soil erosion, lack of water and or, the price of water and labor along with pollution. You can find examples everywhere. We will use two. In Florida, disease gets added to the list of issues facing farmers of citric. Florida production has declined for the last decade and the price for juice keeeps rising. In our leading produce state, California, farmers can't get water. When they do, they cannot find drivers to deliver their harvest to sell. Have you checked the price of a can of tomatoes? Our government is full of BS concerning inflation. A can of tomatoes that cost .50-cents in 2022, now costs .85-cents. This product gets multiplied by the many food products on the market. So, if next month a can of tomatoes only cost .79-cents, the government says deflation. We say BS! It is up over 50%. This is inflation when it becomes ingrained and it hurts all of us. 

Connect the Dots

The government says food increased by 2.9% in 2023. Forget the lie. We now have 8-billion mouths to feed with rising costs. Food banks are becoming a way of life in America. Our poor citizens will multiply claims for SNAP and wear-out the good intentions of good people to care for each other. Where are those migrant millions on the border going to get something to eat, shelter and a job that pays a living wage? Where do people in Gaza go? Where do poor people in the continent of Africa go? In the Caribbean, in South America? Ukraine is a world supplier, but is suffering war. Where can that supply be covered? Another global food supplier, the Philippines is worried about EL Nino. Climate is affecting food growers every where. Food insecurity will be a world issue in 2024.

Education

It may not sound like an important issue, but the media keeps this off the radar. Home schooling is expected to reach 2.7 million students in 2024. COVID began the change. Mass shootings do not help the overall picture of schooling in America. Declining enrollment is on the surface, Behind the front and center of students in the classroom is the results of our teachers. It is a BIG MISS! Kids cannot read, write or do math at grade level. Thry know little about our nation and democracy. Bring back a revised civics class that calls out our government and political parties with the idea of truth. In addition, the kids are obese. Bring back PE! I repeat. Bring back PE! Provide more funding for free meals at school. Give funding to home education, but test the kids to prove that they are meeting basic requirements. We also need to prepare for those migrants who cannot speak English. Maybe we should add a requirement to immigration. The first to enter are those who took the time to learn English. This is an unspoken reason why our overall education is failing. Kids cannot follow in class because they do not speak the language.

There are many other issues like homelessness. Our poor paying jobs have people living in their cars or RVs. Shelters are at full capacity and our streets are littered with the rest and now, migrants. Supply and demand says housing will rise due to the many problems facing our cities.The government says shelter rose in 2023 by 6.5%. When are we going to realize that inflation index should be led by the three things that we all need everyday: energy, food and housing. The Federal Reserve does not include the trio in their phony matrix formula. Another reason to End the Fed!

In addition

Mental health, surging mob/crime in retail, guns and mass shootings (over 600 in each of the last four years), insurane - home and auto, our national debt and the rising cost of interest with that debt will all be on the table for discussion. We also see more labor unrest. Strikes will come to government unions like police, fire, prison help and infrastructure. With that said, the powers-to-be still go status quo. The military budget grows and there is no money for the listed problems above and the unknowns that will appear like the banking problems in 2023 to which still remain behind the scenes. The year 2023 under the Chinese zodiac was the Year of the Rabbit. They had it right with the world population growth. 2024 is their favorite, the Year of the Dragon. I don't put beliefs in horoscopes. I, we believe in God, but there are similarities in signs. We pray that new techniques to agriculture will solve some of our problems. After a good meal, we can think better and be more appreciative of His blessings. 

Get Gold!

Inflation is a world problem. You can see the results if you view the price and value of foreign currencies. At the same time, compare the price of gold to any currency. No experts stated that gold would end 2023 at over $2000. It did at $2071. Look at the Japanese yen. Compare to the Euro. Check out the Turkish lira. How about the poster child, Argentina? It began 2023 at 365 pesos to the dollar. It is now over 800. If those people purchased gold, they would be ahead of the game. King $Dollar is falling. It is testing 103 in a bounce. It appears to heading to test .99. The next level is .96. Each drop adds to the value of gold. We see $2500 in the tea leaves. You have to protect yourself from the reckless idiots responsible for our dollar and its place as the world's reserve currency.  Peace and Happy New Year! 

Odds and Ends: December 2023

 - ...And if you get the chance -                                                                                                                         Sing with a joyful voice and sing with a loving heart                                                                                   Merry Christmas to all and happy birthday, my Lord.

- John Lipareli

If you are not familiar with the above Christmas hymn, it is because it will be released in 2024. You get a sneak preview as readers of our blog. JL is the founder of this blog and the writer to the carol above.

Yesterday connects to today and leads to tomorrow

In December 2022, when the experts were given their forecast, none predicted the banking failures or the weak financial conditions in the banking system due to the Federal Reserve hiking interest rates. They just said things are looking good, the economy is growing and the consumer will continue to spend. Their outlook for the markets was higher from 7% to 15%. We did not.

As for their call, only three sectors in the market had a positive return: Technology, communication service and consumer discretionary. Everything else is lagging or weakening. Their outlook on the consumer was correct, but with over $1 trillion in debt and many behind on rent, car loans and living paycheck-to-paycheck, clouds are on the horizon.

Fundamental Approach

We reminded you that a basic strong indicator of the present and future economy is revealed in the "Cardboard Box" supply and demand. It was down for 2022 and continued down in 2023. We just got a second confirmation with the earnings report from FedEx. They lost a staggering $7.68 billion due to plunging demand. 

Second Opinion - tech approach

The conference board of leading economic indicators reported another down month in a down trendline of reports.   

In addition, the Fed is always wrong, especially when forecasting unemployment. The Fed misses any of their estimates when they hike interest rates concerning unemployment. We bring this up because we feel that the consequences of their actions will be felt by labor in 2024.

In a recent meeting between the Fed chairperson, Powell and Congress, Kennedy of La. He did some math based on information from Powell and the Federal Reserve associated with interest rate hikes, inflation and unemployment. In the past, the Fed stated that in fighting inflation with interest rate hikes, unemployment could rise. For every 2% reduction in inflation, unemployment will rise by 3.6%. This has not happened, so far. However, Kennedy concluded that inflation hit over 9%. To get to the desired 2%, unemployment could rise to 10%. Powell rejected Kennedy. We predict this will reappear in 2024. A report on layoffs for October shows that the pink slip is up 24% for the month.

Same old, same old

China consumes more coal than the rest of the world combined. So much for COP28. Japan keeps their interest rates at negative even though the nation has 2% inflation. Of course, we know that figure is manipulated just like their currency and interest rates.

New Cuture

There are now Dog Bars. You get a play area for Fido and you can watch sports and have a beverage while your dog exercises and plays with other dogs. 

12 Days of Christmas

You would have to be in the millionaire class to purchase the 12 gifts of the song. It will run you $46,000 to shower your love one with the 12 presents. Are you kidding me?! Another proof that the Fed has destroyed our currency and standard of living. Anyway, like the lyrics from our founder's Christmas song, "...true gifts are from the heart."

Last Tidbits

Aside from the takeover by Nippon Steel for US Steel, steel prices are up 55% just since October. And yet, we read that the Fed sees inflation falling to their 2% target. Dear Reader, we remind you that price and volume must be in harmony to determine the market's direction. In most cases, king dollar dictates this motion. At the moment, the dollar is testing its low level at .99. This will be good for the market, especially for gold, but it will also cause inflation for the rest of us. This will be the central story for 2024.  Peace.  Oh yeah, Happy New Year!

Fed Cycle: Boom & Bust

First Crisis

After the influence and probably money corruption led by JP Morgan to create a central bank, the Federal Reserve established since 1913 faced its first test in 1920. The economy experienced a built-up demand from WWI that ended in November 1918. The rising imports put a strain on our currency that was still under the gold standard. To counter inflation the Fed began a series of interest rate hikes. From a war-time low in 1917 of 3.5% to then, a new-record high 7% in 1920. 

Result

This caused a dramatic slow-down to the economy. It led to a depression. Unemployment rose. Prices fell. This is deflation. Fortunately, the Fed had an intelligent leader in the New York region in Benjamin Strong. He felt that the economy would self-adjust. It might take two years, but there is no need to panic by adding stimulus or money printing. The government needed patience to allow the economy to self-adjust. It did. By 1922 the economy fully recovered. His thinking was a boom to bust period is a natural occurrence. The Fed passed the test. The economy continued to expand and the Roaring 20s is now folklore. 

Timeline

The Federal Reserve would be challenged again in 1929. It would fail. In fact, they would be responsible for every economic crisis since 1929 and fail each time. The ego leaders believe that they can engineer an economy. They manipulate interest rates. They print money. Now, they even buy bonds (QE). They back government leaders who choose stimulus. The cabal at the Fed and our wealthy government leaders do not understand two things. One, busts occur naturally. The second is from the mind of the great economists, Milton Friedman. In discussing interest rate changes the Fed does not understand the difference in the date of the change to the time that the impact takes hold. He said, "...it is a long and variable lag of monetary policy..." Benjamin Strong believed it takes at least two years. Putting together Strong and Friedman, we come to this conclusion after we looked at the recent history of rate changes. The present journey of higher rates actually began under chairperson, Yellen in 2015. Prior to that time, the rates were kept artificially low. Rate went from 0% to .25% in 2015 to 5% and 5.5% today. Of course, the rate for you and we pay is considerably higher. Taking the 2 to 3-year lag time in monetary policy, the economy should have adopted well by 2018. It did, but COVID appeared in 2019. This disrupted everything. If we flash forward to 2021 and the end of COVID, monetary policy says the lag time for the effects of the rate increases would be the end of 2023 or some time in 2024. We should experience an economic slow-down and higher unemployment.

We have already stated that you and us at Evolution, already feel like that we are in a recession. We named it the "stealth recession." It appears that the rest of the nation will feel the effects of the idiots at the Federal Reserve sometime in 2024. In the meantime, try to enjoy the holidays by giving your best to one another. Maybe sing our favorite Christmas carol, "All I want for Christmas is to end the Fed!"  Peace. 

Highs and Distribution

We recently stated that you should look for signs of distribution within the stock market. It is your clear warning that a drop is coming. Maybe the people who get to declare whether the economy is in bloom or recession, will raise the dreaded recession flag. We stand by our "stealth recession" call. 

Life

We believe the level of your living standard is the final answer about an economy. The stock market is used as a barometer by government to reflect the economy. It is not. When you go to the grocery store and you cannot afford meat or fish only to see that vegetables are expensive too, you realize that it is difficult to make ends meet. When rent eats up 40 to 50% of your income, you realize that is is difficult to make ends meet. You fill-up your gas-tank because the price has dropped and you fear that it will spike again. This is how most Americans live. We may have some stocks, but whether they rise or fall, we do not sell unless it is an emergency. Stocks are treated like out home. They are part of our nest egg. 

Stock Market

It really has nothing to do with Main St. The retail customer does not move the S&P 500 index. It is hedge funds, institutions and wealthy investors. At the moment, these people believe that the Federal Reserve is through with interest hikes. This has caused the recent rally in the market. The "Magnificent 7" accounts for almost 30% of the S&P index. This is the wind to the market's sails. In addition, the Bulls are putting the squeeze on the Bears. This is always a problem for true value. Stay strong!

Highs and Distribution

When you look at a weekly chart of the Dow, the recent rally is only back to the August level. It is the same for the SPY. If you look at the Transports, they are less than half of the August level. This is disharmony. The volume is strong, but the price swings are muted. This is a sign of distribution. Then, we read where Zuckerberg (META) is selling shares as well as the Nvidia (NVDA) CEO. There are others, but they have not declared to the media. The only way to know is to wait one month. Then, anyone or firm holding 5% must report their investment levels. With that said, it is possible with the "Santa Rally" for the market to hit a new all-time high. See other reasons above.

At last count, analysts are on record believing that there is a 70% chance for the Christmas rally. Dear Reader, we remind you that all of the market crashes appeared just after the market hit a new all-time high. The Federal Reserve will announce their last decree for 2023. We expect no change. One reason: they do not know what to do. They hope for a soft economic landing. Then, they will claim success. If not, they will say we have a plan. Everything is under control. They control the media. However, we favor our holiday song, End the Fed!

Our Holiday Wish

Let's all hope and pray for peace in the Middle East and Europe and as always, we wish you peace.  

A "Golden" Time

- There are no good or bad stocks - only rising and falling stocks.

- Nicolas Darvas

King $Dollar

We expressed our concern about the dollar many times. We advised you to keep an eye on it. Have you? Well, it recently broke its support level at $104.99. It also broke its up trendline and on strong volume. This is big. The underlying problem for the dollar is debt. We all know the stated inbalance of revenues and expenditures. The government says that our debt stands at $31.46 trillion as of May 2023. Dear Reader, it is triple that figure. The debt report does not include benefits like social security and medicare. There are countless off the books billions to the military and other clandestine activities. There is also the little discussed fact that with higher interests rates, the compound total of debt multiplies rapidly. The Federal Reserve has put us in a dangerous position. 

Furthermore, we read that China is seeking to develop an alternative to the dollar in global trading. The BRICKS are real even though their efforts have not dented the dollar's strength and value in trading. However, it shows opposition. It shows change. To overlook threats is like Marie Antoinette, "Let them eat cake!" The poor in France had no bread and could not afford what was available. History has more than one reference to complaints by citizens about their government and their standard of living. The Czar in Russia. King George 111 in England with the American colonies. Our present leaders put the threats out of the news and on the back burner. We don't. There are many others who share our concerns. Central banks have been buyers of gold to have a reserve if something disturbs the market and the dollar. We know what could cause that disturbance. It is debt. 

Gold

It is in our constitution. The greedy and corrupt got us off the gold standard and away from the ideas and values of our founding fathers. The short sighted military leaders (read Pentagon) influenced presidents to appease allies to use our nation as a dumping ground for their exports. They threw a bone to producers by allowing outsourcing. Deficits became normal. After all, we are the reserve currency for the world. There is nothing to worry about. Ask the idiot, Dick Cheney, "Deficits don't matter."

We have abused the privilege. However, there is one refuge for our economic well being. It is the pecious metals. All the negatives about our foreign policy and deficit spending are pointing to a moment. Whatever happens, one thing is for sure, the staus quo will do anything to maintain power and gold will hold its value. It is not just that. It will return to prominence. It will rise in value. With that said, how does it stand with Darvas's quote?

Consolidation

Gold rises and then, it falls. Why, you ask? Because the fiat forces conspire against it. It is a constant battle that forms a lid on gold's advances in price. We always fear when JP Morgan Chase says, "That gold's time to shine is now." They just declared that. There brother in fiat arms is Goldman Sacks. They buy gold to use it later in a shorting process. This is their playbook. They sell the gold that they purchased and at the same time, short the precious metals.

Update Alert: Last weekend the overnight price action in gold burst to a new all-time high. When gold opened in New York, it immediately fell by $50 bucks. This is fiat attacking gold before it gets into everyone's radar. 

It will not work this time. The charts tell us that gold has broken out of a four year consolidation pattern. We also know that the longer the consolidation, the greater the breakout. When you combine this data with the recent price drop in the dollar, we see a floor in the price of gold. We also see a relationship in the falling dollar to the rising price in gold. It appears for each one point drop in the dollar, gold rises $100 dollars. Keep an eye on this coorelation. If we are corrct, the dollar should test its next resistance point at $101.5. If it does, gold should break to a new all-time high around $2290. 

If you cannot afford the bullion, we like Barrick Gold (GOLD) Wheaton Precious Metals (WPM) and a inexpensive, small miner, Argonaut Gold (ARNGF), 

While this may be great for us as investors, I worry about ordinary cirizens. Folks, whether the market rises or falls, people need to make ends meet. A falling dollar will put inflation back into our lives. It will make poor people fall to poverty. The rich like Marie cannot grasp the conditions of the poor until they protest on the street. It could be too late by that time.      Peace.  

Odds and Ends: November 2023

The year is almost over. This holiday season we, at Evolution would like you to remember all the information that we provided. Our predictions to which the majority of them, were correct and free of charge. We say this not to toot our horn, but keep it in mind because we have decided to self-publish our book. We need your support when it happens. Thank you.

LEI

The conference board of leading indicators has now fallen 19 months in a row. This only backs up our conclusion that we are in a "stealth recession." Everything is skewed by the government to make whatever administration is in power, to look good. They massage and manipulate all the data. We don't. How about unemployment? The shenanigans began in the 1930s. Look at the...

Population

The estimate is 333.29 million citizens. We have no idea on how many undocumented people are living among us. Anyway, the labor bureau says the current labor force is 164.29 million strong. Dear Reader, that figure drops to 132.34 million full-time employees to which means that there are more people without work (169 million) than are working. We did some math. There are 69 million receiving social security and or, benefits. This leaves us with around 100 million or more than any country in Europe less Russia. There are 73 million young people, but the stat includes all students. This means that 27 million citizens are unaccounted for and as far as the government is concerned, do not exist. So much for the labor stat of 3.9% unemployment. How about...

Inflation

The government says it has dropped to 3.2%. We say this is a lie because it does not provide the compound rate of inflation. It means that prices have risen another 3.2% to the previous inflated level from 2022 and does not show how this ingrained menace adds costs when you look at the previous years 2021 and 2020 and 2019. Milton Friedman said it best, "Inflation is always and everywhere a monetary phenonmenon". The Federal Reserve has been on a 6.5% trendline of money printing since 2011. In 2019, they exploded by adding another $5 trillion. The printing press now sits at $4 trillion over the trendline. Inflation is not going away. Will you join our chorus, "End the Fed!"

King $Dollar

It broke support at 105. The next stop is 101.5. This is great for commodities. See next week's info on projections. Each full percentage basis tick adds to inflation. With that said, those low gasoline prices will soon spike. 

Last Tidbit

Filings show that 50 more firms are no longer in operation. Gone. Over. Belly-up. The total for the year is 561 and counting. This represents more than 2-per day every business week. This is another indicator that reflects the weakness in our economy. After you read and digests these facts, one must realize that we need a new political party that supports citizens and workers. One party that does what is best for all Americans and gives the truth. One that explains what it does and why.   Peace. 

Changed Outlook

We stated last December that our nation and economy is in a "stealth recession." One of our decisive indicators was the labor participation rate. It stood at a little over 62%. When we added inflation to those poor numbers, we knew people were hurting no matter what President Biden or Jerome Powell of the Federal Reserve said. 

We also knew that 48% of our labor force is in service be it trucking, retail or similar. We put two-and-two together. The conclusion would be a slow-down in these firms that would result in layoffs and bankruptcies. We were correct on that aspect. However, what we didn't know until now is this: what happened to those employees who lost their job?

Do the Math

We did. Beginning from a full employment level which correlates to a 69% participation rate and the actual 62% rate. Our estimate is 10-12 million workers. We also knew many women left the labor force due to COVID. Many have not returned. They are among the lost workers. So, how did these people adjust to a life without a paycheck?

Disability

Ambulance lawyers fill nighttime television on smaller channels with ads. One of their best and most repeated sound bites concerns unemployment, "Maybe your lost job has caused you mental distress and or, other internal problems? Maybe you filed a claim and you were rejected? No longer. We're here to help." These type of lawyers are gaming the system. We all lose.

They take a piece of your benefit, and they generally win. We now have the answer to where all those who lost a job have gone. There are 12 million people in the age group of 18-64 who collect on the dole. This has nothing to do with unemployment insurance. This is a separate agency. Even if a new plant came into their district that offered employment, these check-living souls would not seek to reenter for employment. Why risk a sure thing when this company may pack up and leave after a few years? This new psyche is terrible. It goes against our American character of self-reliance. It goes against our optimistic outlook. This is very sad.

It Gets Worse

The above disability claims are predominantly men who are over 30. The younger group (18-30) are wasting away in their parents home. They found a hobby that makes them happy in their present state. They are not on drugs, per se. They are abdicted to video games. They have friends locally, nationally and internationally on the internet. They will wake up one morning to their 30th birthday with no job, no relationship skills and no future. There are untold millions like this who are not looking for work or continuing with ther education. Many cannot afford college and living in the present does not force them to feel that they need to change their lifestyle.

3.9%

That is the stat released by the government for our unemployment rate. It really is around 15%. This lie is covered with disability payments. Then, you add the millions of immigrants on the border and we will go from the most productive nation ever, to one that is living by government subsidence. This will lead to a more declining standard of living. When neighborhoods decline in value, people will burn their homes for insurance to flee because no one will buy them. These potential negative spiral needs action now before it is too late. We have nothing against compassion, but people need more than meeting rent and food on the table. We need to feel safe. We need a purpose. We need to know and trust our neighbors. We need belief in a better tomorrow. When you outsourced jobs, you put a nail into a coffin for our American way of life. The greedy, the Republicans, the Democrats and the Federal Reserve are all guilty.  

We Conclude:

The market bulls are placing bets that the Fed is done with rate hikes. They see a return to the way "things get done." We don't. The market may continue to rally, but our economy is built on sand. There are too many problems for everyday people to make ends meet. $King Dollar has peaked. This will help the market, but hurt the rest of us. Inflation is now ingrained and all it needs and what we see is this: more worker unrest and more strikes in 2024. One geopolitical disturbance like one that affects oil and a wave will disrupt the market's present thinking. We believe that the haves will sell at the next high. If you look for distribution selling, this will confirm our belief. If we enter a recession by government standards, things will take a turn for the worst. AI and robotics will take millions of jobs. This will not be an overnight occurrence. It will be like the weather, sunny in some places and raining in others. The result is danger. It could lead to social unrest. Let us hope that the government stops using our nation as a dumping ground for foreign products. We need more tariffs on all imports. There are other options. Our water solution could be the answer, but first our book needs to be published.  Even with this pessimistic outlook, be of good cheer and try to have a wonderful and blessed Thanksgiving. Peace.