Eerie Quiet

- We don't know what will happen with tariffs, with immigration, with fiscal policy, and with                     regulation policy.

- Federal Reserve Chair, Jerome Powell (Last week).

What?

Don't fret! This is not a mea culpa. If it were, Powell would admit the Fed was established for the rich - to protect against foolish, risky ventures by using taxpayer money as a back-up (privatize the profits, socialize the losses). However, with so much happening last week and so much passed as "a matter of fact" that something began turning in our stomachs. 

We had President Trump signing executive orders, one after another. We had the yearly meeting in Davos and the first meeting of the Federal Reserve for 2025. We got news, but no ramifications from acts. Actions have consequences. The stock market quivered, but ended up for the month to which is usually a good indicator for the year. Nevertheless, there were too many actions. This is the root of our worry.

Of course, we expect a tit-for-tat in tariffs. This is why we advocate not tokenism of 10% to 25%, but real, harsh taxes like 100% or MORE. We force our manufacturers back home. The politics of small actions only hurt ordinary Americans with higher inflation. In either case, an economic slowdown will happen. Our method will have the results intended, but pussy-footing around will cause serious economic repercussions. The yearly GDP came in at 2.8% and the yearly inflation rate came in at 2.9%. We still are in a stealth recession. The people are suffering and Wall St does not represent our economic struggles. Even the ground hog sensed the poor vibes. He decided to go back to sleep for another six weeks and then, maybe things will appear better. The only problem with that is the date. It will be around the Ides of March. If you combine that with the year of the snake, something will hit the fan?

 A quick recap of the first year in office...

Previously

New administrations usually get a honeymoon period before a shoe drops. This use to be the thinking. One year into Bush's first term, nothing until 9/11. The first shoe led to war that lasted over twenty years. His last two years saw the second shoe drop. The financial crisis. We all suffered except the rich. They received tax cuts worth millions and our deficit hit $9 trillion. President Obama was greeted by the recession. He listened and followed all the greedy, idiots that caused the problem. He bailed out the rich and left the rest of us to our own devices. No honeymoon. President Trump's first term had a short honeymoon and then, COVID-19. The rich got richer and more of us got poorer. In the decade, our deficit added another $10 trillion. It was $19 trillion and growing...

President Biden wanted a legacy of doing for everyone. His chip and infrastructure acts were home runs. Everything else was not. His spending was reckless. During his term, we should all realize that government lies and that the Federal Reserve do not know what they are doing except burying all of us in debt. The cycle says that $40 trillion is coming even before the decade ends. This is where we are except no one mentions how many enemies of the US and our democratic experiment are out there.

List

The real dangers start at home. The rich have lobbyists in the ear of ALL politicians. If you look at the above patterns in government, only the rich benefitted with tax cuts and the lie of the Federal Reserve saying that they pump money as stimulus into the economoy. They pump it into finance which is the pocket for the wealthy. This needs to change! Change the tax structure and loopholes to put a 50% tax rate on the wealthy. This is needed to save the dollar or we become a third world nation which the anti-democracy people aspire.

European banks generally follow the Fed.They say this is cooperation. We use a different word, collusion. With our no rate cut, we expect the ECB to do the same. They get a cheaper euro that will help with their exports unless new tariffs give cause for concern and a change in policy. China has put them on notice with its subsidized EVs that threaten the economies of the EU. Then, the old problems of Europe, the aristicracy. The elites use Davos. They use their power and influence to push ideas that cause many problems in American society. Many large firms had ties to Nazi Germany and they resent the US for WWII. Immigration is causing budget and economic problems. The war in Ukraine does not help. Overall, things do not look good for the EU.

South America begins in Mexico due to culture, religion and language. Mexico sends 80% of its exports to the US. Tariffs will hurt not only Mexico, but US citizens with inflation. China is also seeking to use the new NAFTA to push their EVs into the US to which will further hurt our economy. We say end the lie of free trade. End NAFTA! Go back to taxing some things with the idea that balances trade with our two border nations.  

Brazil is playing us and China. This will explode on them. The leading economic nation in the southern hemisphere will find that their BRICS alliance is a tool being used by China with Russia being duped. They should emulate Paraguay, Uruguay or Chile. Hey, Argentina, are you listening?  

China is building "ghost" cities because they are looking at war. Their other choice could be their long game option. We have a feeling that they will try another end run to change the world away from the dollar to the IMF's Special Drawing Rights. This egotism will not end well. What will the first option bring? What will their new empire get? The loss of millions of Chinese, destruction to the planet and loss of resources. Wake up! Learn to live and let live.   Peace.

Odds and Ends: January 2025

 - The only constant is change.

- (Great minds think alike) Heraclitus and Ben Franklin

A week into the new administration and this week begins the new year for the Chinese people. It ends on 3rd of Feburary. The stock market is riding high with Trump euphoria, but there are cracks beneath the surface. Trump has declared openly that he wants rates lower, both here and in Davos. The Fed will announce their first decision for 2025 on Wednesday. The only constant is change.

What We See with the Periscope

Since the president didn't mention the things that we see and none really do, we will offer them here.

Retail: The only thing growing since 2023 is store closings. They are up 69%. Ouch!

They are not alone. Manufacturering shed another 13,000 quality jobs last month. Their share of employment is down to 10% and falling. 

Debt: The budget deficit rose in December. It is now 40% higher than it was a year ago. Many economists see a financial crisis coming during Trump's administration. Sadly, the only thing the Democrats offer is hoping he fails with an eye on the next election in two years. They seek power not solutions. A good reason why they lost.

Housing: Since we are a consumer society, this is the most important. It effects and connects to every- thing. Homebuilders are showing a serious decline on the charts. This is a dark cloud on the market and the economy. Home sales in 2024 were the lowest in 30 years.

Energy: Trump declared, "Drill, baby!" He knows we need more energy. It creates wealth and it helps family budgets when it is cheap. The "experts" predicted coal usage would decline in 2023. Now, they say it will increase through 2027. Trump is against wind energy. We feel he is totally wrong on the issue. He has not said much about solar. Together, this will not help climate and world heating. This leads us to a more dangerous topic, the movement of the magnetic poles. In our deeper self, we, at Evolution feel this is the source to climate change with wind, rain and sunlight. 

Magnetic Poles are shifting. No one knows or has an answer to the problem, but it causes problems to navigation and communication beside our belief in climate change. We also think that the world will see more earthquakes due to the movement.

Tariffs: They start soon for Canada and Mexico. They should be to all nations and much, much higher. This is tokenism to fulfill a campaign promise.

Meanwhile

The Chinese are out celebrating. Maybe they will take time to read? They will find that a BRIC member, India is complaining (as we predicted) about China being a hypocrite. China will not give them access to tech and other quality products. We know why. China fears that foreign forms will move production to India. Then, we read this. China is not accepting Russian oil due to sanctions. Since when did China follow US policy? Maybe they are opening a door to ease tension? We say, do not fall into this trap. This will connect to the Panama Canal and Taiwan. After all, it is the year of the snake.  

Good News

There is a international goodwill concerning wildfires. Nations help each other by offering fire fighters to help in an emergency. Our northern neighbor, Canada has welcomed over 9,000 fire fighters from other countries to help them and now, they sent over 4,000 to LA to help us. We love this, but do not be misled by One World advocates. Just like social security is a great idea, does not mean socialism is a great idea even though this is one of their contributions.   Peace. 

 

Pre-Inauguration and Inauguration

Best Wishes:

- Heavenly Father, please give me discernment to recognize Your peace above everything else. Give me the guidance to recognize the signs of Your divine wisdom. Help me to seek confirmation and assurance in making decisions that align with Your perfect plan for my life. I rely on Your peace and the Holy Spirit's wisdom to lead me in all things. In Jesus's name I pray, Amen

- Inner Peace (anonymous).  

Cheers and Blues

We all see what we want to see. We all hear what we want to hear. In this special piece, I have divided the work into two parts, the pre-inauguration and inauguration. I did the first part on Saturday and the second after the new president was sworn-in. The early thoughts were things that I hoped the president would give direction. The second part is a reflection on what PresidentTrump didn't or did say.

Before

To us, here at Evolution, the most important thing that connects to everything is the dollar and our debt. Our government needs to rein in spending. Why do we give food stamps to illegals and fight about giving food to our poor? There is speculation about more money under tax cuts. The belief is the rich will use the money for investment. We say, "Yeah! For themselves!" The concept of tariffs to push manufacturers home is the right call. However, the tax must be high enough and to all nations to induce the change. We say, what is needed is an objective. Domestic producers should have a minimum of 40% market niche. We need to reverse the economic loss of quality jobs to which kills our middle class, hurts social mobility and are overall standard of living. Our nation is not even in the top 20 in standard of living.

The first place President Trump should address is affordable housing. Give citizens a stake in their communities. We need to turn the tide against drug usage and selling. We need to put money into mental health that has kids acting out violently. When you help the lowest, you build a foundation that promotes the general welfare. Lastly, our military is misguided, misdirected and misled. We don't need to waste time on "wokeness." We need technicians to run programs for drones and to protect against hacking. We do not need sitting duck aircraft carriers. We need nuclear subs, self flying planes, supersonic missiles and end the wasteful use of troops in over 100 foreign bases. We need to put pressure on our so-called allies to spend on their military. We need to put pressure on Israel and Netauyahu to stop being a bully, war-monger or we will not provide anymore support for Israel until they turn a cheek and to allow a two-state deal. Trump is right about the southern border with nations emptying their jails to jump across our border. We saw the same thing with Castro back in the day.  

Inauguration Day

Trump began, "I will put America first." He went on and on about how our nation will return to its greatness, but he offered no details. He spoke about our concerns about about government and the way it is used to weaponize against opposition. This is correct except that he plans to do the same thing to his enemies. I did like his comment on, "Revolution of Common Sense." We can only hope. He directed his message to the Southern Border and illegals. He added that he sees a connection to terrorists cartels and he will get them. We say, "Good." He will stop the EV money and favor regular auto production. He will overhaul our trade deals. Again, we say, "Good." His department of efficiency (DOGE) is excellent, but will the recommendations be followed? He declared that he is taking back the Panama Canal as that nation violated the gift agreement. This will be a conflict with China unless some other deal is made. He tried to invoke JFK by saying that we will go to Mars.

Later, in a second speech given in Emancipation Hall, he cited how ex-president Biden pardoned 33 murders. Who, you may ask? We don't know the list, but it includes, his son Hunter, Dr. Fauci and General Mark Milley. 

He did not mention his tax cuts, TikTok, our debt or his pardoning of the "hostages" of January 6th. We will add this one tidbit. Steve Bannon, the self-appointed populist leader for Trump has said this, "He will get rid of Musk!" This is a big cloud because Trump's last term had one in and one out month after month. 

With that said, our last thought is one of hope like with spring. "May He grant you joy of heart and may peace abide among you...

- Sirach 50:23        Peace.

Insurance for Insurance

- ...Walk a Mile in His Moccasins. 

- Mary T. Lathrop

LA Fires

The expression is probably circulating within a lot of people at this time. It definitely will arise to all who lost their home in the terrible fires in and around Los Angeles. The region of the rich will have many repercussions. The ultra rich have other homes, but many who live in the location do not. They were fortunate to buy and live in a beautiful setting. Now, the above thought is running along with many others in their minds. Suddenly, they face and fear the specter of being poor. 

The only positive coming from the ashes is compassion. The other concerns our standard of living, our economy and our future. Sadly, it all starts with money. 

Who Pays?

Some insurance firms may look to bankruptcy. Lawyers will offer pennies on the dollar. Many of the larger companies have already begun to exit California like they did in Florida and Gulf Coast communities. The LA wildfire disaster is not only destroying lives, but draining insurance coffers and wiping out California's massive state sponsored insurance program. Apparently, capitalist firms will take your premiums until the rainy day comes. How can it be legal for a firm to collect for years and then, decide that they no longer want your business because they can see the clouds forming? There should be some sought of penalty like refunding part of the premiums received if the homeowner never filed a claim?

Anyway, government entered. In flood areas along the coast, they offer insurance to which is generally cheaper than market firms. California also entered the market with its "FAIR" program. They had to adjust their prices upward to cover inflation. However, the replacement costs just in this location could wipe out all of its funds. What then?

State Farm said, "It will not renew 72,000 homes and apartments policies statewide." This was back in  March. Did they have a crystal ball? They also canceled 69% of policies in the Pacific Palisades zip code. Most insurance firms, large and small, act like a bookie. If the man gets too much action like a super bowl, he lays off some of the action to large pockets. If he loses, he is still is in business. Insurance companies do the same thing with specialized firms that handle reinsurance or insurance for insurance. The problem is they too are refusing to add the call for reinsurance. The recent climate changes have caused big losses. These firms are the last resort and they closed their door.

More $Bucks

California is rewriting their laws to stop the pull out by home insurance firms. They are now allowing them to raise premiums due to catastrophic chart models. The bottom line here is everyone in the nation will see their insurance bill rise to go along with the cost for eggs and everything else.

Governments should not be worrying about potential conflicts and budgeting more for the military, but finding ways to help their citizens in this new environment of continual disasters like flooding, like earthquakes and wildfires. Then again, the LA homeowners are realizing the costs to replace and how little their dollar savings go to survive. They may finally understand what we have been saying for years. The reason for the loss of purchasing power of the dollar is because of the crooked cabal of the Federal Reserve to which our meme calls, "End the Fed!"  Peace. 

Outlook 2025: Part ll

- ...Lean on me when times are bad                                                                                                                     When the day comes and you're down                                                                                                            In a river of trouble and about to drown                                                                                                       Just hold on, I'm comin' Hold on, I'm comin'

- Dave &Sam   

Love those lyrics. Here, at Evolution, we do not like to advocate specific stocks because if they go a muck, we will feel pain as well as you. However, we do believe that we have an understanding of the economy. We also inform. We give praise when due. We object the way our leaders run the nation. If we lived in Communists China or Communists Russia, we be in jail or dead. We thank the founders of our great nation. With that said, we offer part ll. It will center around commodities.    

Oil

Contrary to clean energy, oil is still the most important product. China is the world's biggest importer. It is also the largest EV seller in total terms. Tesla's "Y" model is the largest model sold. When providing any new year outlook, one must realize China and its culture. The Chinese New Year or Lunar Holiday puts a major damper on many commodities. In addition, the growth of the BRICS alliance is slowly changing how commodity agreements settle. This may connect to the Chinese zodiac. This is the year of the green wood snake. It is yin or female. The passive nature reflects a slow, steady movement and a snake can swallow a larger animal. I don't like snakes and I don't like where this trends. Then again, I do not put faith in zodiac signs, but in God.

Oil has been consolidating in its bottom range. China is also getting unknown amounts of oil from Russia and Iran. This indicates that oil should test its low as the holiday ends. At the same time, Trump will be in office and we can see some effects of his new administration. That will be the time to determine oil's direction.   

Dr. Copper

The same forecast will be extended to copper. China has dual control as the largest consumer and largest producer. If Trump goes against clean energy, demand will shrink. Copper could decline to test the lows of 2024 and maybe even lower?  Housing demand is not helping either, but this direction will depend on mortgage rates. They are still hovering at highs around 7% and that kills copper demand. 

Grains

Food inflation is real. The spiral could end with protective tariffs. There is no reason for the US to import food, but we do. We need to protect our fishermen too. We import too much fish from foreign soils. We do not need a supply chain across oceans when we have roads and truckers to move product here in the US. By the way, we definitely need to protect our citrus, tomato and vegetable growers. While I'm at it, we need to put some money in diary to protect our milk and egg industry.

Precious Metals

Gold had a great year in 2024. It rallied 27%. The reason is dual. The US deficit and the BRICS seeking to dethrown king dollar. We see the same reasons to push gold even higher. Charts help you see the staircase upward. The second phase or leg of the rally should occur sometime in 2025. The target is $3400. At that time, we will look at the price action and volume. We like Barrick Gold (GOLD) and Alamos Gold (AGI). Wheaton (WPM) is a good streamer play. Find a pullback level. We believe this is a safe bet. We have positions in the three.

The world is changing and chips could be looked at as a commodity. We do not like bitcoin as this is just replacing corrupt bankers with a new, unknown banker. The latter coud be hacked, especially if someone applies quantum computing. Then, what do you have? NOTHING!  Then gain, you had nothing anyway as this is just another form of fiat.

There is a reason why gold holds its place. We do not have to repeat the reasons. The founders understood the reasons and that is why they put gold as our currency. Of course, overtime, the corrupt changed this with the cabal of crooks, the Federal Reserve. It is why we say, "End the Fed!"      Peace.       

Outlook 2025: Part 1

- The darkest hour is also its peak, the change to light is coming.

- JFL

With that thought we, at Evolution hope for the best for President-elect Trump and his administration. He has made a lot of promises like all politicians. The ones that call for a return of manufracturing to the US is our biggest hope. 

Trump inherits a good economy, better than average unemployment and a strong dollar. In fact, King $Dollar had its best year in a decade. It rose 7.4% to close last Friday at 107.79 and hanging at its high. If Trump imposes strong tariffs, this would be the time. Manufacturers would receive a strong dollar that protects domestic production and the tariffs would give them a cushion to reestablish to their roots. He would be smart to utilize Biden's Inflation Relief Act to produce home grown chips. We fear that he will dismantle it as he is opposed to green energy like wind farms.

Our industrial leaders need a new outlook. They should seek to control the domestic market with exports being just gravy. The whole globalization thing hid the outsourcing of jobs, our declining standard of living and the loss of the middle class. If Trump allows manufacturers to just move production out of China only to relocate to VietNam or similar, the whole process will be a failure. To establish domestic dominance, Trump needs to look at auto producers. After a home, this is consumers biggest purchase.

Autos, EVs and Trucks

Our largest company, GM had 6.2m in sales for 2024. It was a good year, but the conglomerate is not the giant in the field or in the US. Car dealers sold 16m in the US in 2024 and Toyota is king with 10.8m in sales. The silver medal goes to Volkswagen with 8.8m. However, the company has lots of problems and we see another entering their position. The bronze medal comes as a surprise. It is Kia with 7.1m. Of the big three, Ford finished seventh and Dodge (Stellantis) was not even in the top ten. This is what I mean to control the domestic market. If you cannot get your fellow citizens to buy your product, what does that say about your product?

The surprise could be the merger of Nissan and Honda. If it happens, they will take the silver unless Trump follows through to protect domestic firms.  

Stock Market

Almost every analysis sees growth. A few are hedging their call by saying there will be bumps in the road. The year 2024 was very strong as the rally from 2023 continued. However, the inflation invasion made for a tough year for ordinary citizens. Wall Street never considers regular folk, but that will change as consumers rebel against inflation by cutting spending. Valuations will come into play. The present PE ratio is historically too high at 38. This is 54% higher than average. The same market "experts" see GDP growing at 1.8%. Of course, we, at Evolution say this is not only wrong and misleading, but needs to be changed to reflect wrongs like damage to the environment and climate.  We say look at...

January Barometer

The thinking is if the first few trading days are up as well as the month, this is a strong indicator of a good year. Also, in a related point to king dollar, follow the money supply and industrial utilization. Production has been at zero or below. This is a big negative as well as the declines in retail. A large department store, Nordstrom (JWN) has been in a slightly uptrend, but the down days come with strong  down volume. This could be a sign of distribution before the fall? This happened to Kohls (KSS). It was $27 last April and Friday closed at $14.36. Retail is the first solid indicator of the changing attitudes of the consumer. It has been a disaster for the last decade.

Media and Telecom

The consumer is also cutting the cord in their effort to fight inflation. Wall Street will be watching media and telecom closely. Overall, media is projected to a stabilized version. However, recent activity suggest big changes are coming. The big boys are hoping that Trump provides looser regulations. Trump is putting Brendon Carr as head of the Federal Communications Commission. He favors deregulation. The warchests are filling up. Warner Bros (WBD), Discovery and Paramount Global (PARA) took a $15 billion hit on their declining value of their cable companies. The linear networks are cutting costs and laying off people. Comcast is spining off its cable firms. All this points to having cash and where their future lies. They are not alone as Amazon and Netflix took a piece of the NFL. Verizon paid big bucks to acquire Frontier Communications for $20 billion. Meanwhile, Google and Microsoft are preparing for the future as they make their own chips and seek quantum. We gave that update in a piece last month.

Housing

We would be remissed if we did not include the biggest consumer putchase and heart of the American dream, home ownership. One word describes it, disaster. The average price for a home in the US is $420,000 as of September. When November ended, it rose to $430K. Our current morgage rates hover around 7%. This breaks down to about $3583 per month and that figure does not include taxes and insurance. To qualify, you need about $12,000 a month on income. This equates to a yearly salary of $144,000. The only people that I can think of who make that much bread are in the professions. This makes home ownership almost impossible. This obstacle stops social mobility. This is what is killing ordinary citizens. We know who the blame falls upon. This is why we say, "End the Fed!" 

Immigration

Trump will do something. We believe private prisons firms will make money off of hardship. However, the truth is we cannot provide for the excessive number of people at the border. The proof is our rising homelessness. We need quality jobs and then, we will have room at the inn.

If you can find it on the internet, check out the new year celebration in Dubai. Got to be one of the best and a beautiful second to Sydney, Australia. Oh, yeah, Happy New Year! - Peace.

Odds and Ends: December 2024

- The CEOs of the top four tech companies met with President-elect Trump at his home in West Palm         Beach last week. The group consisted of Meta, Amazon, Google and Apple. The clues were there all       along, but to what end, we can only guess. One thing is for sure. We cannot blame or get mad at lazy       people, they didn't do anything.

With that said, we, at Evolution wish you all a Merry Christmas! For those of other denominations, Happy Holidays!  

Before we end this short version, we leave a suggestion for those who have to work, for those who are far from home and for those who are isolated in our fragmented society. You can find solace and help in the Bible. When you are facing...

Anger: Ephesians 4:31-32, James 1:19-20 and Proverbs 15:1.                                                                    Anxiety: 1 Peter 5:7, Matthew 11:28-30 and Proverbs 12:25.                                                                      Crisis: Jeremiah 29:11-13, Lamentat 3:55-58 and Proverbs 3:5-6.                                                              Depression: Nehmiah 8:10, Hosea 6:1 and Psalm 5-6.                                                                                Discouragement: Romans 12: 11-12, John 14:27 and Deuteronomy 31:8.                                                  Fear: Isaiah 41:13, Joshua 1:9 and Psalm 461-3.                                                                                          Grief: 1 Thessalonians 4: 13-18, John 11: 25-27 and Matthew 5:4                                                              Illness: Acts 3:16, James 5:16 and Jeremiah 17:14.                                                                                      Loneliness: 2 Corinthians 6:18 and Deuteronomy 31:6...Peace