The Stupidity of Intimidation

- Stupid is as stupid does.

- Forrest Gump

The past two weeks have had too many incidents in the world where intimidation has been used without the thought of its danger. If one were to breakdown the global to the individual, you can see my point.

A wife has been repeatedly abused by her husband. They separate. She gets a gun for protection. He enters her home. She tells him to leave. He doesn't. She takes out her gun to convince him. There is a moment of indecision. However, her finger is on the trigger. The intimidation is on hold, when suddenly, the gun fires. In the police report, she says she didn't mean to pull the trigger. The gun just went off!

In another report in the news, a child was shot and killed by a stray bullet. Two rivals were shooting at each other, not intending to kill, but to intimidate. In the police report, the suspect said that he didn't mean it. It was an accident.

I think you get the point. However, when powerful rivals with nuclear capability go at it, the stakes of intimidation could be catastrophic. If one were to connect recent news items, the picture gets scary.

Doomsday Clock

I think it just moved to one minute to twelve. We need a world daylight saving time by pushing the clock back by one hour or it is all over!?!

China celebrates the Communist Party. The leader, Xi, declares that China must unify the nation. He refers to Taiwan. Then, in a show of force and intimidation, China flies jet fighters and bombers on the border of Taiwan's air space. A high official declares, "That no one can stop China." Then, China joins Russia in a joint military exercise.

Not to be intimidated by the joint military exercises of China and Russia, India sends 50,000 troops to the Tibetan border. 

The Japanese delegate to the US says that he fears that China and Russia will attack Hawaii. Maybe, Japan is looking for conviction with its alley, the US against the Communist rivals? Later in the same week, Japan joins the Philippines in a dual military exercise. Maybe, they seek to secure another alley under the same objective? Then, deputy prime minister, Taro Aso says that Japan will defend Taiwan if it attacked. Japan will back the US against any aggression from China over Taiwan. This is choosing sides and daring the opposition. Not good by either side.

In what may not appear as related, but I feel is definitely related was the US report on UFOs. Apparently, US security fliers have noticed strange, hypersonic speed UFOs off our coast. At the same time, Russia announces that they have "conquered" hypersonic. This means that they are more advanced than the US and West in airspeed. It is not the first time. Russia has many air records like the first nation in space, Sputnik. Those are not aliens flying off our coasts, but Russian drones. If they can fly faster than our defense, they could drop nuclear bombs on us, Intimidation!

Then, a Russian ship fires at an English ship in the Black Sea. Intimidation!

NATO and Ukraine conduct joint exercises in the same region. Provocation? Intimidation?

President Putin says that even if the English ship was sunk that would not start WWIII. What if the next time, an ego driven officer decides to hit a ship? What if an ego driven officer decides to respond by sinking the intimidating vessel? What police report can prevent a nuclear strike? Hands on a trigger can lead to the gun firing. 

Then, another thing that might not appear as related, but Sebastian feels is definitely related. It is hacking. Hacking gets news as a crime act for money under ransomware. The US asks Russia to look into the matter. Why waste your time? When you ask any Communist nation or rival to look into something that is causing the West harm, there is never any positive or long lasting results.  The best prove is North Korea building nuclear weapons. 

What if these hackers are given government protection and the rewards are split? US sanctions on Russia makes it hard to get greenbacks. Hackers get dollars.

Just last week another serious hack to a Miami firm software firm will have serious repercussions. By attacking the central spine of the firm, the hackers changed the firm's software. The number of businesses will be in the hundreds who will suffer from ransomware. Taking this further, what if these hackers strike everywhere, all at once? Our nation comes to a halt. Nuclear hypersonic drones destroy cities. It appears all is lost for the US except ICBMs destroy Russia, China and North Korea. What is left? The world is already suffering from abuse, pollution, global warming and neglect. Radiation will make unusable the bread basket of the world. Whatever is left of live, it won't be livable.

The arms race was the original intimidation factor, but at least, it did keep the peace. China is also building its own space station. They intend to control the high ground. We better build a new network that is virus and hack free because the writing is on the subway walls with China's "Compliance Issue." Until man learns to live and let live, there is no such thing as Independence Day. Forrest Gump said it best, "Stupid is as stupid does." and "That's all I got to say about that."   Peace.

Odds and Ends: June 2021

- The only thing that is constant, is change.

- Heraclites 

Today, we have reached the halfway point in the year. What do we know? The recovery from the pandemic is not just one vaccine away. The unemployed, as we have mentioned, will be a stumbling block to the recovery. Wall Street, as it always does when it gets cheap money, over estimates earnings and stock evaluations. The American society is fragmented. The Federal Reserve is a phony, lying agency. When will people realize that its purpose is to privatize profits for the banking system and socialize any losses. Their latest BS is on inflation:

Trapped in Purgatory.

The Fed cannot raise interest rates because our debt load is becoming unserviceable. They will keep pointing out aspects on data that inflation is temporary. They will play the "Fed Watch" game. The media will concentrate on the mention of individual words rather than calling the Fed out. Then, of course, they are bought and paid for. They are controlled by the people who get the benefits from the Federal Reserve. We say, "End the Fed!"

Speaking of the Banking System...

The ramifications of Basil III will come into play by the end of the year. This accord raised the asset of gold to equal cash. This is huge. Gold will take off because banks will have to increase their cover on leverage, especially with unallocated gold. This is abstract gold that is traded when in actuality, the contract does not have the physical gold behind any trades. This will result in a short squeeze on gold. This will take some of the manipulation out of gold. It is going up...and big!  

Final Extension...

The Biden administration extended the moratorium on evictions until the end of July. This is it. There will be no more extensions. Do you know what this really means? We predict that 1 September will become "Nomadic Day" in the US. Renters will be moving or find their possessions out on the street. They will be evicted by the millions. This visualization on the news will bring awareness to our high cost of shelter to which the Federal Reserve does not include in their perverse formula for inflation. Do you realize that the refugees in war torn nations like Syria are bundled into tent cities? This sad aspect could be coming to America as cities lack affordable housing, The cheapest answer will be, Tent Cities.

Why, you ask? Because home prices are unaffordable to our wage structure. The average medium price for an existing home in May rose to a record of $350,000. The cost for a new home is off the charts and our space.

Policing...

The result of evictions and other social problems will lead to protests and demonstrations. Does someone in the government foresee this possibility? I say yes because $150 billion of stimulus money that was suppose to go for education is being diverted for police departments. In addition, another $350 billion from the American Rescue Bill is going to states for their police departments. No one mentions new training that is dearly needed as well as better solutions in arrest procedures. Police are not being defunded, but recapitalized!

Good News...

Recent developments concerning supply chains and future delivery are being addressed by one-third of all producers in China. They are waking up to the fact that they operate in a Communist nation. The Red Party just showed its true colors by passing the "Compliance Issue." This act requires all companies to pledge allegiance to China over their nation of origin. These firms are making plans to exit China. Yea! The only negative is most of these firms will relocate to other Asian nations like Vietnam. One of the few things that Trump did right was to lower corporate taxes to motivate companies to return to the US. If Biden wants to balance his budget, he should raise import taxes to convince producers to provide jobs in America. A report by UBS says 76% of US companies are considering moving their operations out of China. Yea! Double, Yea! 

I have mentioned a few companies that we hate like Apple, Amazon and Nike because they give jobs to China and make their profits in America. Well, Nike is moving out of China. Again, Yea! This company is making, big, big money. They bring in one billion a week, Wow! While I'm at it, a shout-out to Black and Decker. They are leaving China for Texas. God Bless Them!

Bad news...

Washington Prime filed for Chapter 11 bankruptcy. It owns 101 malls. This is the third mall retailer to file.

Last Thought...

Need a quality job? Learn pipefitting or welding. The infrastructure bill guarantees that the need will be there in every state and city in the US. Be thankful for this opportunity. Our government rarely does what our nation and citizens really need. This work will be rewarding financially as well as emotionally.  Peace.

$King Dollar

 When something changes its course, it is wise to know why and where it is heading. King Dollar moved two months in two hours last week. Gold dropped over $100. in the same time span. I can hear Vince Lombardi yelling, "What the hell is going on out there?!"

Fibonacci Day

Last Friday was June 18th. or 61/8, a strong Fibonacci level. However, there are other days that match the sequence. So, no! It is not the reason. The reason is...

Inflation!

Even the Fed Chairman had to address it. He admitted its presence, but called it a "transitory" effect of the economy being turned back on after the effects of the pandemic and stimulus. 

Crime Scene...

Consider that the G-7 nations met in the prior week. You have to speculate the discussions. There are many issues. Trade and tariffs are hot topics as well as defense. Who pays? This is the crucial point. As par for the course, it will be the US. Then, the other partners must consider that the US is worse off than their economies, and if not worse off, the US bears the brunt of defense measures. So, the cumulative effects of money printing could hurt the UD dollar and then, all nations suffer through trade.

If one were to step back and observe the dollar in relationship to the Euro and Yen even before the pandemic, it was declining in value. A few nations like Russia and China are attempting to wean their economies off the dollar. The effects of this could have been seen with the dollars value in the basket of currencies. It was declining there too. Then, the US Congress is debating more stimulus. This bodes for more future declines in the value of the dollar. If one were also to compare the dollar to its old "gold" value standard back in 1971, all the money printing would mean bankruptcy. What saved the dollar was the move to "petrol" dollars. Countries had to exchange their currencies to buy US dollars to buy oil and other commodities. In addition, the advent of the Euro to global trading. This union also had to print to protect members like Greece, Spain and Italy as well as others.

Actions by the G-7 went into effect, fast. This is one of the reasons why the dollar rose beyond normal.

Suspect #1...

Did you know that the data for core inflation is due to be released this Friday? The Fed will speak, yet again. This is one way that they control the temperature of the market and economy. They have other ways. The Fed also speaks behind closed doors. They have definitely supported the rise in the value of the dollar. Wall Street has a saying, "Don't fight the Fed!" The Fed also announced a change in policy. They will raise interest rates sooner. They propose two increases. So what! The rate will still be below 1%. Get real! The market overreacted, especially gold, but then again, fiat hates gold. It is the battle of a solid currency that promotes a stable living standard to one of debt with rising inflation and a lower standard of living. Actions speak louder than words. Last week, we saw the actions of the Fed.

We saw their manipulation of the dollar. A rising dollar tames inflation. The ego of the Fed and its chairman will be on display this Friday. They will toast themselves as their view of inflation as transitory. They will appear correct. They are not.

Charts

They are saying the dollar faces strong resistance at 93.50. Last Friday, it closed at 92.21. Dear Reader, even if the dollar breaks though that resistance point, it means nothing. Step aside! Look at the big picture. You will see that even at 96, the dollar will only be back in its consolidation range and at the bottom level at that point. Then, watch and wait! If Congress passes another $6 trillion infrastructure bill, that will amount to over 8000% increase n the money supply. You cannot print with impunity.

Scary thought...Roughly 77% of all the dollars ever printed, were created since last March.

Those new dollars will be worth less than before. This is inflation! This is what banks are for, loans which is debt. Citizens cannot print to cover rising costs. This is how the stealth effects of inflation slowly erodes a standard of living. It is why the US is not even in the top twenty nations in standard of living. The facts support our view. We have a government that is bought by money and its legislators who violate their responsibility under the constitution, "to promote the general welfare." They are only concerned about reelection and their welfare. We have surging crime and media misinformation. We have crumbling infrastructure and slums in all our major cities. We have over 20% in poverty. We have over 20% who are low-wage earners. We have countless millions who live paycheck-to-paycheck. The point that the US is a rich nation is BS! It is ego. It is not reality. 

Other clues...

Copper and lumber recently hit all-time highs. Last week, the two retraced. They only returned to their breakout point. Keep an eye on them, especially, Dr. Copper. China has recently sold its reserves of copper, zinc and aluminum. Does this mean anything? This month, yes. Future? No. They will resupply at a future date. 

Emerging nations...

They will be hurt with a rising dollar. This is exporting inflation. It is not intended, but as the world's reserve currency, this is a fact of life. These smaller economies will pay more for commodities. This will force them to raise prices. When the dollar begins to falter, US citizens will feel more inflation because everything we have is imported and all imports will cost more. Clues will surface if the dollar breaks its recent low of 89.535. With that said...

King Dollar is not looking very good at this point in our history. Our leaders run deficits and the Federal Reserve supports it with debt. We need quality jobs that pay a living wage. We need tariffs to protect companies and workers. Everyone else does it and they all criticize us when we do it. This should be the central point in any discussion or summit. Fair trade that gives all a quality of life. Our nation and the West may have separation of state and church, but if we are Christian nations, we need to act with His teachings.

- Therefore, if anyone is in Christ, he is a new creation. The old has passed away; behold, the new has come.

- 2 Corinthians 5:17

The first step leads back to what we, at Evolution say, "End the Fed!"  

Inflation: 2%, 5% or 10%?

We all know the BS from the Federal Reserve. They seek a 2% inflation level. They will gladly tell you that even though the US economy continues to grow, American consumers have not faced inflationary pressures in over 20 years. We just cannot find inflation anywhere. I guess that is easy when you leave out the three most important necessities. Then, they talk in a swifter mode to show their data. If you leave out food and energy, our economy almost suffers from deflation. 

If you question their approach about leaving out food and energy, they give you a condescending answer of volatility. The price swings in those two components are too great to be included. Your question implies that you know little about economics. I say, "My first sentence sums up the Federal Reserve, BS!"

If oil declined in price and food supply was so great that it too declined in price, what then? I'll tell you. Consumers, who are renters, will save for a home, pay down debt or save for a rainy day. Homeowners will do a home project, get a second car or take a vacation. In all instances, the money saved will eventually find its way into the economy and our GDP.  

Now, let us look at the higher cost for fuel and food. Keep in mind, fuel covers heating and cooling in the home. We have to eat, everyday. Everyone utilizes a budget except government. If you need more expenditures for gas in the car and your utility bill, you need more income. The problem is wages have been stagnant since the 1970s. This is reflected in the aspect of wage/financial structure. In a fight against unions, US producers began outsourcing labor in the 1970s. Can you see the connection? At the same time our standard of living began to decline, is the same time outsourcing began in earnest. This aspect never changed. When the word became so great against exporting jobs, producers went to non-union states, mostly in the South. This is the present picture for higher paying jobs in America. The majority, 70% of us, reply on service. The word is a joke. It means, no benefits, low pay and no future. There are people in our government who understand the situation. In a dual benefit for these leaders, (opponents say that they are buying votes,) they included in the stimulus, extra federal cash benefits with unemployment. Both the Trump and Biden administrations also saw the wreckage on the housing market due to the pandemic. It is why both presidents signed Executive Orders against evictions and foreclosure. Then, the vaccine's came. State governments are going bust due to low revenues from the pandemic. Workers who received benefits were able to investigate other means of future employment. They no longer wanted a no benefit job with low pay and no future. We see the conflict and results. There are 25 states who are rejecting extra government benefits. They are cutting off 300,000 unemployment claims as of last Saturday. Next month, another 4.2 million will be in the same boat. Unemployment checks will drop by 79% for most and 60% will get nothing. Go hungry or take that low paying job! This is the corruption of our so-called government leaders. These are the same group who okayed outsourcing without putting tariffs on imports to protect US workers. These same people control the media. If you protest their actions, they classify you as "Populist." This is also another use of condescension. By the people and for the people are only empty words. Our nation needs a new political party, the Liberty Party where the wisdom of the crowd is recognized.

That was then, This is now...

Now that you have the employment picture, we are also seeing inflation. The word or concept is manipulated by the Federal Reserve. If one were to look at housing which by the way, is also not included in their matrix formula used by the agency, it has been rising since the recovery from the financial crisis of 2008. Home prices are unaffordable by 70% of the US population according to a study by CBS. The inflation data revealed by the government last week, said prices have increased by 5% year-over-year from last May. When I went to school, 2 goes into 5, two and one-half times. So, inflation in the US for the fifth month of the year, is already over twice the Federal Reserve's target. It gets worse!

10-Year and 30-Year T-Bill

As of last Friday, the 10-year note paid 1.45% and the 30-year note gave you a return of 2.14%. Dear Reader, we have already doubled what the government says is a return on money by purchasing their bond and the year is not even half over, never mind 10 and 30 years from now. So much, BS! This points to what we say, "Manipulation! Corruption! End the Fed!" 

Back to inflation:

Some time last year, a report came out declaring that lumber would add $12,000 to the price of a new home. It was glossed over quickly. People were being infected and dying. Folks, inflation, like the virus, was showing its first signs. Earlier this year, a follow-up report on the price increases in lumber would now add $24,000 to the price of a new home. Last week, lumber costs rose to increase the increase. Lumber adds $36,000 to the cost for a new home. You can multiply that by these facts. Copper and iron ore are at all-time highs. The Federal Reserve admits to inflation, but adds a disclosure. They say it is only temporary. We say, "More BS!" We have shown you this through lumber, but it is everywhere. Gasoline costs one dollar more per gallon than last year. Food is up across the board. Supply chains are clogged and backed up. Demand for packaging, chips and truck drivers exceed any response. Then, there is this example put out by a small contractor from Florida. 

The cost to lay a foundation is making contracting extremely difficult. The cost for a slab has gone up by 104%. Lumber is up by 202%. Electrical supplies are up by 49%. Drywall is up 20%. Appliances have no date for delivery and costs are up 55%. Paint is rising. It is up 60% and workers are difficult to employ. Plumbers and their supplies want more. Parts are up 15 to 30%. The idea of just in time delivery is out the door. This inflationary picture shows the difficulty in consumers biggest purchase. 

In the bigger picture, the price for shipping containers is up 300%. It is so bad that producers in China are even complaining. Now, that is a first! Do you realize what this component means to costs? It will raise the price from coffee to toothbrushes. You put that together with commodities and the picture of inflation begins to look like the 1970s. Funny, how many things go back to that period? Anyway, no new mines were being developed by big mining firms. No new exploration by oil concerns as capital expenses are being cut. Finally, even banking are making less loans with stricter standards. All these components will take at least three years to fix. Inflation is finally being admitted by government. The real question is what BS will they supply months from now as inflation rears its head? Temporary? They try to find some credence in the aspect that copper and lumber have retraced. Dear Reader, the lumber retraction to $1000 is twice the historic average. Temporary? Get out of town! When did you ever hear of cheaper rent, cheaper cars and cheaper utilities?  The government's report without the three necessities of life, food, energy and shelter rose by 3.8%. Our estimates has inflation running at 10%. Can't wait to hear when they say a little inflation means the economy is growing. Of course, when they say that they won't extrapolate to show what stagflation means. Let's hope we don't see that form of economics. Peace.

Summertime Blues

- I'm a-gonna raise a fuss, I'm a-gonna raise a holler                                                                                      About a-working all summer, just trying to earn a dollar                                                                              Every time I call my baby, trying to get a date                                                                                              My boss says, "No dice son, you got to work late." 

- Eddie Cochran 

This rocking toon of the 50s, no longer reflects American teenagers. There are many reasons. One that I dispute is kids won't work at menial type jobs. The days of stocking shelves at the local supermarket has competition. Older employees have stayed on the job, especially women. Immigrants who speak English and technology are closing the employment window. There are less and less opportunities in small business. There are no opportunities in large firms because there are no manufacturing enterprises in town. One more little twist, newspapers. No one can find a job posted in the help ad because newspapers are a dying business. Job applications over the internet is just talk. No one gets any responses. Knowledge of specialized summer employment at swim holes, amusement parks or similar is not readily known. All of the above and so many more reasons seem to block the connection of a job and a worker. 

The virus along with rising rents and unaffordable housing has turned young people home. Many live with their parents. Some are using the time to return to education for a future job. Some are saving to accumulate enough to purchase their own home. Again, the reasons are many and the numbers are staggering. The virus also closed schools. A guardian needs to watch the kids. 

Just in time, delivery

This money saving technique of ordering product and timing the delivery to end inventory costs is biting every nation in the world. All of a sudden, firms went from no orders for months and now, the phone is ringing off the hook or the emails are piling up. Firms need to retool, hire workers and get production rolling. Wall Street has no idea what real work is and what it takes to get things done. You cannot flip a switch and chips come out. All the expectations of stimulus and recovery were overblown. This is one reason that we, at Evolution stated a correction is coming. Labor is central and we have many issues with workers. It found a catalyst in COVID. 

The virus caused absenteeism with workers. This resulted in product delays, shipping delays and together pushed the costs up and prices rose. We have inflation. This makes the whole cycle a little more complicated. The job from more education may not be there. Home and rents are higher. Schools still have not opened.  

Then, there is this trend that was in progress long before the pandemic hit us, the retail calamity. Young people have lost jobs in firms both large and small. A retail manager cannot see himself as a short order cook which has no future. Let someone else do it except everyone understands the job position and its future outlook. Also, jobs are similar to real estate, location, location, location. It seems unreal, but there are locations with good job openings, but no applicants. There are jobs in big cities like New York, Seattle, et all, but the other aspects of life like housing, utilities and taxes have caused citizens to move from the area. I don't like Amazon due to its anti-union stance, but I will say this for the company. It pays better than the competition. Many workers who were laid off have found employment with Amazon. This is a shift from low-wage to a better wage. Oh, yeah. This shift causes wage increases which is inflationary too. With all of the above being stated and what I will disclose, there is an unknown reason why many firms have gone bust and their workers have not relocated to positions that are available in the marketplace at the moment. The following firms are closing stores. Keep in mind that each store represents many people and the sum total equals millions of jobs. There are 8-million less workers in the labor force than there was prior to the pandemic and we have a larger population.

Stores Gone Along With Jobs:

*Amazon Go. Yes, even this online giant found out that brick and mortar is a tough business even with the technology of no cashier.                                                                                                                        *Kroger. Supermarket giant is not so big as 10 stores will be lost.                                                              *Century 21. Company has been declining for a while and now, 13 bite the dust. Rumor of bankruptcy.  *Nordstrom. Department store giant is suffering with its connection to malls that are hurting. Company is seeking to build its online sales, but is losing 16 stores.                                                                            *Best Buy. 18 down with plans for more to follow. It blames the pandemic.                                              *L'Occitane. Retail losing 23 stores due to virus.                                                                                        *Fry's Electronics. All 31 stores of a family firm are no longer.                                                                  *Bath and Body Work. 50 down and counting. Unit of L-brand which is also hurting.                              *Denny's. Losing 60 locations. Blames the virus.                                                                                        *Microsoft. Yes, even this giant is closing all of its 70 locations. All sales will be online.                          *Sears. 82 more gone with only 30 left.                                                                                                        *Macy's. 125 will no longer support the parade.                                                                                          *Brooks Brothers. 126 stores closing.                                                                                                           There are so many firms that a list will appear too long. Now, just names and amount of damage.

Godiva, 128 stores, Signet Jeweler, 150 stores, Capri Holding, 170 stores, Carter's, 200 stores.                Bed, Bath and Beyond, 200 stores, Gap & Banana Republic, 225 stores, JC Penny, 242 stores,                American Eagle, 250 stores, K Mart, 330 stores, AT&T, 250 locations, Francesca's, 275 stores,                Stein Mart, 279 stores, Victoria's Secret, another L-Brand losing stores, Children's Place, 300 stores,      Christopher & Banks, 449 stores, Tailored Brands, 500 stores, Family Video, 500 stores,                          Game Stop 557 stores, Stage Star, 758 sites, Pier 1, 942 stores, GNC, 1200 stores and the biggest bust,   Ascena Retail Group, 1600 stores. Consider the last retail firm. If it just had 10 people in each store that means 16,000 people are looking for work. 

Breaking news,

Pep Boys just announced 100 stores will be closed. A Los Angeles parent company of a chain of steakhouses, Grill Concepts has just entered into bankruptcy. If you noticed, I did not include any restaurants in the above list. From large chains to individuals establishments, they are closing in record numbers. The final tally will be in the tens of thousands. Wall Street will eventually wake up to our labor problem. As for now, too much cheap money is flowing. Firms like Robinhood are cannibalizing short sellers. Big hedge funds continue to buy at any price. The market is extremely dangerous at the moment. Of course, due to the Fed's manipulations of interest rates, there is no safe place to park your money. This is the blues of our time.

This summer will be like no other. In addition, any protests will be dangerous due to the fact that so many people are unemployed. One idiot throwing a rock could result in riots to which adds more problems to retail, employment and worse, our society. I'm sorry Eddie, but earning a dollar and getting a date are way down on the list for the Summertime Blues.

Time To Shine

When basketball coach Vitale got his chance to nationally broadcast college games on television, he gave us all a whole new lexicon of words and meanings with letters. His "PTP" leads the pack. Prime Time Players was then used to sell everything from new TV shows to sport clothes. He had new versions like "DD= Dapper Dandy and AB= Awesome Baby!" week-after-week. He was a must be heard announcer. He got his chance and he shined. 

There are many other examples like actors given a major role as a debut. If they hit it right like "Lawrence of Arabia or Rocky," they had a career. 

Stocks have their own history. Millions were made in the early days of tech until the tech wreck reared its head. Bitcoin is showing the same signs. Then, there are those firms or commodities that has stood the test of time. People in the know, when they refer to these, use words like "cycle." 

We, at Evolution believe in cycles. At the moment, there is a quiet debate among the leaders in this field. Harry Denton sees a possible crash by the end of June. The people who run Stock Charts.com see more bullish signs. Dear Reader, you have read our feelings on the matter. At the moment, President Biden is not only pushing the envelop on spending, he is building a larger package to hold his, "something for everyone approach." When your budget is $6 trillion, which is about one-third of our economy, you are spending like a drunk sailor. If he does not counter his spending plans with revenue, our dollar is in big trouble. This brings us to our title. 

We already know that inflation is rearing its head. Manufacturers can't find people, supply chains are tight, raw material costs are off the charts and supply is low. The president is throwing money at any problem. When you mix the drink of money, debt and inflation, only gold can keep you financially healthy. Its time to shine is here. Let's go to the charts...

$Gold, $XAU and $HUI...

Gold is attacking the $1900 level. It takes energy to pass a strong resistance area. Gold should be able to penetrate the $1920 price. If it does, then $1979 is in sight. The last time it was at these levels, it was attacked and fell to a strong support price of $1680. Now, the new support level has been raised to $1850. This is a strong signal for gold. I did not put silver in the sub-headline, but when one talks about gold, silver is always included. At present, silver is stronger than gold. It is in its consolidation range. It is building cause (strength in buying) to re-attack $30. If it can break-through, then $37 is the next target.

I usually get my clues on the price action of gold from the XAU and HUI. If they are trending up, gold will follow. Also, if they are trending down, gold will retrace. At the moment, the XAU is at highs. It just eclipsed its "golden cross." This is extremely bullish. The HUI is not in harmony. I do not like that aspect. It needs to pass 340 and establish a new high. If the two can merge in harmony, we can make some money with the four stocks that I recommended in the past. 

Help!

No, not the Beatles song. Help is coming from directions and places to add flavor to our golden potion. There are many little usages for gold which will add to its price. It is used in your smartphone and other quality gadgets. It is rooted in culture in the two largest populations in the world.

China

With the world's largest population, people are getting married. In China, gold is given as a wedding present. There are over 8 million weddings each year in China. These presents consume 40% of China's buying in gold. These gifts are rarely sold like for hard times. Generally, they are passed down like a family heirloom. Then, there is...

India 

Gold is even deeper in culture in India. India households hold more gold than the US holds in Fort Knox. They possess 5X (five times) our total. So much for being a poor nation. The people of that nation understand the dangers of inflation. It is another reason to keep gold. It takes 140,000 rupees to purchase just one ounce of gold. Somehow, they manage. In 1960, the ratio was 168 rupees for one ounce. They also have the pandemic which is showing itself in their nation. This has put off weddings. This is another positive for gold. The pent-up demand of delayed weddings and other festivals will only cause the price of gold to rise.

Finally, there is this reality. Like the shortages in many staples due to COVID, many gold producers lost workers and thus, production. In the face of strong demand, there is less production. Prices will rise. This is basic economics. Keep in mind this aspect in the US. Consumers expectation for inflation in 2022 is 3.4% and we already know that inflation for March and April of this year to be 1.4% or equivalent to the 10-Year T-Bill. Ten years in two months!   Peace.

Odds and Ends: May 2021

 We told you at the end of April that the old slogan, "Sell in May and go away" is no longer valid due to our changing economy, the machinations of the Federal Reserve and the weakening influence of the agricultural industry with farm loans. In addition, the influx of so much stimulus money that created excessive hopes for not only an economic recovery, but an off the chart growth expectation. So far, it isn't happening. With that said, don't be fooled by the recent uptick in the market. It is "window dressing" at the end of the month and first few days after.

We, at Evolution stated that the recovery had major barricades to overcome. The first and most important is labor. No matter what is written in the media, labor has not returned. A few have noted the loss of women into the labor participation force as one of the culprits. This is very true. If parents feel a danger in letting their kids go to school and they have to stay home to watch them, then, Houston, we have a problem. However, this is only one aspect. The stimulus gave the unemployed an opportunity to do something different in their life. It could be learning solar instillation, coding or some other skill that would result in wages above minimum. The phony politicians in 22 states notice that employers that counted on bottom line wages are having trouble finding workers. So, these BS artists who ran on getting higher paying jobs in their states, have elected to end the extra unemployment income from the stimulus act. At the moment, this is a standoff. 

I like to insert this informative piece from an unknown Fed official. He stated that the true unemployment picture is 10% rather than the 5.8% published by the government. We agree. We have showed you the difference in government data. One agency says 8 million are unemployed while the total of all states claims is 16 million. Go figure?

Then, we have the problem with shelter. Housing is not included in the lying, phony Federal Reserve matrix formula for inflation. Rents and housing are becoming unaffordable. A CBS report shows 71% of the nation cannot afford to purchase a house. People are living in vans, cars and or, are homeless. The government is aware of this. The stimulus provided $40B to help renters and home owners. However, only 10% of this money has been utilized. It is an example of too little too late. Evictions would be terrifying if it were not for successive moratoriums on them by Trump and Biden. Some people are electing to move to new areas of the nation. This type of data lags, but it will soon be known. Some states, probably in the sunbelt will gain population while the northeast will lose. The census revealed this trend. It continues. 

Then, something that is debated, but not seen in twenty years, inflation. Economists differ on the causes of inflation. I agree with Milton Friedman that when the money supply is increased, inflation rears its head. We have increased the money supply ten times over with little change in inflation during the past two decades. There are reasons. One, almost all nations have increased their money supply. This levels the effect. China is the second. It has control of global trading and uses manipulation to keep its currency low. Together, these aspects have kept the dangerous genie of inflation in the bottle. Now, it is showing its ugly head. Many realize it could get worse, stagflation. The thinking causes many overreactions. For instance, housing developers noticed the rising costs of lumber. They built ahead of demand. They figured to capture a lower price for their needs with time allowing for the market forces to work to lower the price of lumber. What happened? Housing is feeling the twin forces of excessively high prices and jittery buyers. For the third straight month, existing home sales fell. 

The stock market reflects this new uncertainty. The down days in the market show very high volume. The up days rise on low volume. There is no conviction. It even appears that the market is about to roll over. Didn't we say that June is the new May? However, the Bulls do not want to surrender. They keep hoping for the "melt-up." Then, least we forget, the "Yellen" Yellen day. She expressed the danger in inflation. People put two-and-two together. The Fed will raise rates? Just this thought sent the market crashing. She back tracked her comments and the market recovered...for the day.

It is not just housing, but all the components needed in a home from furniture to lumber. Wood costs are at records along with copper and almost everything else. Add to this, the fallout effects from the pandemic. Meat and poultry rose due to producers losing workers to the virus. Consumers substituted to avoid inflation. Neither had a positive effect because prices rose all across the board. Truck companies could not find drivers due to the virus. Shortages are becoming apparent. Finally, high tech showed it too was not immune to the effects of the pandemic. Chip demand exceeds supply. It takes months to correct and of course, prices will rise. 

When you cook and you are putting everything into the pot, the odds and ends must always include the dollar action. It is basic like salt and pepper. King Dollar keeps attempting to rise above the .92 level. It has always failed. On the downside, it touches .89, but fails to drop lower. The dollar's eventual direction will determine the direction of our economy. We, at Evolution see the dollar breaking lower to .83. When it reaches that level, all things will have a new perspective. 

Believe It or Not

A tiger was loose in Houston. After a little panic (tigers weigh around 700 pounds) the animal was safely returned to its owner. The whole episode reveals this: There are more "pet" tigers in captivity (5,000) than in the wild (3,900).

Remember when...

President Bush declared after he signed the tax relief bill that our deficits would fall by 2020? Remember when President Obama signed a similar legislation? He said our deficits would be ending by 2025? Remember when President Trump signed his tax relief? He said our deficits would be over by 2024, after he is reelected? The March deficit broke another negative record. The one it broke was the month before to which was broken by the previous month. Bottom line: three straight record months of deficits. The monthly figure was $74.4 billion. The BS about this sad point is it shows our economy improving. For who, we ask? The problem with these sound bytes by the shills is a full story. The deficits show an improved economy for the exporters and the same old, same old for the US.

Tesla...

could be in trouble? The "Big Short" guy, Michael Burry is shorting the stock. Many in the past have tried to undermine the electric car company and all have suffered with their attempts. The first resistance point would be $539. If strong, down volume, then $450 is game. Two other plays that are constantly being shorted with extreme volatility are GME and AMC. I don't like either of these two.

Law of Accelerating...

is a concept, I don't know if it is a law, but it seems to be. It says, the more money you print, the more money you have to print again, just to keep the system going. This will be in the news a lot, especially this year due to all the stimulus and its resulting debt. To me, it is another way to say, End the Fed!        Peace.