Gold: It's in the Constitution

- no state shall make any thing but gold and silver coin a tender payment of debts. 

- US Constitution

There's More

There are 7 clauses that the Founders put into the constitution about precious metals. They hated the idea of fiat, but greed, ego and stupidity runs deep in our government leaders. The US Treasury redefines legal tender statutorily as all coins and currency issued by Congress. This envokes the right of "sovereignty" over the nation. It does not have that right as our revolution was to take power from government and to be given to the people. 

Why Gold?

There are many reasons, but at Evolution our belief is in the wisdom of the Founders. They feared debt and gold was a natural balance to government spending to curtail debt. 

The Federal Reserve is fiat. They are a crooked cabal that banks favor because it gives them access to riches that they have not had to "work" to receive. This is why we never put stock into Goldman Sachs or JP Morgan Chase as they have sold their soul to fiat and the central bank concept. The Fed is also their insurance policy if they screw up like they have repeatedly done. It allows banks to privatize the profits and socialize the losses. We say, "End the Fed!"

There are other, more closer to home reasons to invest in gold. The list is led by the US Dollar. Our debt is approaching unpayable levels. There is serious challenges to its reserve status. In addition, something is afoot. If you recall, President Trump stated that he wanted to inventory the gold supply in Fort Knox. We have heard nothing further. Then, we read about mass shipments of gold from London to the US. We hear that Germany may want its gold that is held in New York vaults to come back to the Motherland. We read that China is backing Shanghai Gold Exchange to be the premier trading center for gold. The challenges to the reserve status of the dollar is two-fold. The BRICS alliance is seeking to replace the dollar in trading. This is slow, but it gains momentum with every mistake by the Fed. The IMF has already developed a replacement for the dollar with its "Special Drawing Rights (SDR)". This is a basket of currencies with the world's top economies. If either transpires, the value of our dollar would shrink. We would feel inflation of about 30%. This screams that you better have some gold because it always holds its value.  

Fed Now

Have you heard about the new power that the Federal Reserve has? With Fed Now, the Fed can control all your financial data. By having 900 banks submit to the plan, they have surveillance of you and any transactions you make. This is similar to the Chinese dictatorial control with social credit and digital money. This leads to tyranny. They can freeze your money and assets. If you have gold, you will have a life boat. So, let us look at gold, where it is and going.    

Important Price Levels

Gold closed at $3324 last Friday. It just made a new all-time high at $3500. If you recall, we predicted that gold would climb to $3400 when it was just $2400. We see $4000 coming. With that said, it will not be a straight up move. We see a retracement to around $2950. Why, you ask? 

Silver. It's last high has not been pierced. Silver fails when it reaches $34. It cannot break $35. Gold cannot go higher without silver breaking to a new high. Keep in mind that silver is the most manipulated metal. There are legally tendered silver notes circulating at 378 to 1. This means that there are 378 chances for a crisis due to supply that does not match the circulating notes. There's more. For the past few years, there has been a shortage of silver needed that is not produced. Because precious metals can be melted to be reused, the recycling has covered the demand. There is a need for 200 million more ounces every year. This is a ticking time bomb along with our dollar. Speaking of which, the dollar closed at 100.34 last Friday. We see a bounce up tp 103 and then, a fall to 98. Remember, a higher dollar is a lid on gold. A lower dollar opens the spigot. One indicator that you can use to relate to the price of gold is GDX. It just popped from a breakout level at $35. This will be support for the next move up after a retracement.

Related

Do you recall the Basel III accord?  Well, this July activates the agreement that allows banks to include any gold that they possess as a Tier 1 asset for reserve requirements. There are a few ways to look at this agreement. We see the unbievable point that the anti-gold, fiat bankers had to have an agreement to call and place gold as a top level asset? At least, the deal was made. This will create a floor for gold...Peace.

Trump 2.0: Thinking and Tariffs - 100 Days

- Insanity is doing the same thing over and over and expecting a different outcome.

- Albert Einstein

His Edicts

President Trump is correct to change course on imports. Warren Buffett is wrong to say that trade is being weaponized by tariffs. Trump is using Einstein logic. We suffer $1,000,000,000 in deficits through trade. Obviously, there is something wrong. We are not the Washington Generals playing the global, Globetrotters. The global community, especially China is using our economy to save theirs. We will suffer like an addict under withdrawals. We need to return to self-sufficiency or we are doomed. With our opinion stated, we turn to two reports. One is from a conference by leading professionals. The other is from the brokerage firm, Morgan Stanley. 

Conference

They offered four points. The first is debatable. They pointed out the aspect that the stock market can predict the future. The market is in a downtrend. This leads to a recession call. Their second feeling is the recent stock losses with many in bear territory sets a vibe for recession even if Trump says that he does not follow the market. The third centers on the Federal Reserve. Trump has called for Powell to lower interest rates. If you recall, Trump appointed Powell. Now, in heated moments, he calls for Powell to resign or be fired. Trump wants cheap money. It will help with mortgages and housing, but at the same time, it will create inflation. Lastly, the group suggested to watch the dollar. We agree on this point. It has been weakening. A weak dollar makes imports more expensive. This is a tough, Catch 22 situation. The conference did not address the college funding politics. We, at Evolution feel that the government should end all funding to traditional colleges. We feel the money should go to vocational schooling. We need robot technicians, solar and wind who can design, build and repair. We need more tech people and jobs so they can apply their knowledge. 

Morgan Stanley

The group reminded us that us that President Trump signed 130 Executive Orders in his first 95 days. They reasoned that Trump comes at you from many different ways, but he only seeks a few of his edicts. The question is what policies will stick? The biggest is his tariffs. The percentage changes from week-to-week. They feel the 10% will be the final number. This will relate to what deregulation that Trump seeks. The president wants domestic manufacturing, but it will take time. The struggle will be when the imports cause shortages and the courage of the president to stay on course. Keep in mind that July 9th is the 90 day amnesty period. Dear Reader, there are two more deadline dates. One is the 31st of December 2025. The original tax cuts end. If Trump uses the tariff revenue for the tax cuts for his rich friends, we are doomed as well as $King Dollar. The second concerns the debt ceiling. It is due again and will be a big debate this summer. The group feels inflation will return with the possibility of stagflation. As you know, we, at Evolution have told you that we have been in stagflation since the end of 2022. Of course, this firm is part of the staus quo. By the way, the Fed meets today. We think that their will be no interest rate change, but Powell will appease Trump by saying the possibility is on the table.   

Meanwhile,

The Israeli cabinet has voted to occupy Gaza. The government is Ben Netanyahu. He uses any excuse to do what I fear, the annexation of all Gaza or a big chunk of it. If he does this, he will embolded Israel's enemies. It is no wonder that he does not want to recognize the Palestines. He wants their land. This is a sad day for the remaining hostages and peace in the Middle East. 

The market has returned to the rally mode. However, the price level is either reaching or is at resistance. The Dow's price point is 41,500. The SPX is 5800 and the Transports is 16,000. Pay attention! The tariff effect will not be felt or noticed until late May and June. Peace.

Odds and Ends: April 2025

- The strokes of the pen need deliberations as much as the sword needs swiftness.

- Julia Ward Howe

Related...

...to the above quote. This is to all leaders in regards to trade and conflicts in Europe, Middle East and Africa. You need to pause and think about all the possibilities of decisions and choose a course that reflects the best possible outcome and not a political course. 

Meanwhile

The US housing market continues to decline and fell 11.9% for new homes in March and 5.9% in all sales. Usually, it takes a long time for related data to affect stock prices. Now, we are seeing home builders begin to crater. Look at Lenar! It was $190 last September and it touched $100 in April.  How about the upscale developer, Toll Brothers? It was $167 last November and it fell below $90 in April. In our consumer society, a home is our biggest purchase and no one is buying and most cannot afford to buy. There is also one important piece of info. The stock market is now 2x the GDP. There have been only two other times. It happened here in 1929 and in Japan in 1989. Market is overpriced!

You need another example? Check out Zoom (ZM). It was $600 in 2020 and rising. It is now $77. Ouch!

Related

We have posted the continuing disaster in our retail sector, but now, we read layoffs in tech. These are high paying jobs that give people the means to purchase a new home to which creates more supply and choices for the market. It is a sad fact that the US and Canada are one, two or last place among advanced societies in providing housing per 1,000 of its citizens. 

Even though Intel announced bad news concerning its labor force as the firm is laying off 21,000 workers or 20%, we read some good news. Apple will invest $500 billion in America. Yea! They are going to build a new factory that will provide 20,000 jobs in the next four years. They shoud contact the experience of the Intel people. Before we relax, our cabal "friends" in the banking industry are setting the table for another financial crisis. 

Banking Cabal

They are quietly putting mischief in play. They are packaging and selling new securities. These include corporate loans, credit card debt, even golf carts. While this may blow up in their face, they don't worry. They know the Fed will have their back. When they do, you should realize why we say, "End the Fed!"

Brazil

The nation is offering a new bond that is tied to saving trees that eat up CO2. The money will aid nations who seek to save their forests.

Salt

Yes, salt. Sodium batteries could be the answer that EVs seek? Nation Energy is close to a solution.

Corn Fuel

We had the additive, ethanol for cars for a long time. Now, Lanza Tech is making ethanol jet fuel. However, it is still a work in progress.

DOGE

The "Dodge" boy, Musk shows his true love for America by building his new, 3rd. megafactory in...Shanghai. Also, he is cutting back his government duties to devote more time to his auto firm, Tesla. We have nothing against this, but we think that he should look into a merger with an EV charging firm to cover on a national scale. We see this happening in Europe. They worry about China covering the continent with one of their EV charging systems. The Spark Alliance has four European nations forming a partnership. The group has Italy's EV Atlente, Germany's Ionity, Netherland's Fartneed and France's Electra. We like Evgo in America, but we will wait for a price around $2.00. 

Did you know...

...that 90% of US bio-firms get 90% of substances as an import? President Trump should look into Big Pharma as they may not be aligned as a cabal. but they operate as one. 

Finally...

did someone say, "Yea!" This falls under the idiot column. Bill Gates is backing a biotech startup, Savor. They plan to sell a synthetic vegan butter that includes carbon dioxide. I'll pay extra for the real thing, thank you. Peace

Our Biggest Concern

- Debt can exceed the country's ability to pay it off

- Brutus in Anti-Federalist paper to Hamilton

Today

I write this on Saturday, the 19th of April. In the above quote, the warning by Brutus is proving to be true. On this day in 1775, the "Shot Heard Around the World" was fired at Lexington and Concord. Did all the founding fathers risk their lives because egotistical politicians could get elected and re-elected? In the present fight with and over tariffs, the numbers are facts. However, in today's lying and hiding of truth, they are manipulated or just kept of the books. 

Examples

They are everywhere. When LBJ decided to go to war in VietNam, he hid (off the books) the cost of the war. China does the same thing with their debt. The actual amount would say that China is bankrupt. They are not alone. Our Federal Reserve is bankrupt, but they can print money to keep solvent. Bernie Madoff coud not. He destroyed a lot of people. China has a whole nation of Bernie Madoff's. The collapse of the China Evergrande Group in real estate is just one, but it effected millions of Chinese people. The Communist Party does not care, they just print like the Fed. At one time, there were 500 electric auto firms in China. The government subsidized them all. They sought the one who could succeed, grab market share and provide jobs. There are 400 losers. The one positive thing that I will say about China is this: they use debt to buy real things. In contrast, we use debt to buy more debt. 

Brutus, John Adams and Thomas Jefferson...

They all warned about using debt, but the idiot Democrats and Republicans think that they know better than our founders. Their arrogant egos in relationship to our economy and debt tells a different story. For instance, the Biden budget for 2024 stated that our debt as a percentage of GDP was only 6%. This is mamipulation! 

Facts and Numbers are boring, but do not lie.

US budget for 2024 was $6.8 trillion. Our deficit for the year was $1.01 trillion. Dear Reader, basic math says that our deficit was 15% of our budget. The use of GDP pushes the figure to 6%, but that is the manipulation. The trend is frightening. The yearly deficit for 2014 was only $483 billion. This year, the interest alone will exceed one trillion = $1,000,000,000. The annual deficit compounds. The recent trend says that in seven years, 2032, this interest alone will double and the total would be unpayable. The smoking gun points to our trading deficit. Last year, it was $1 trillion and the figure has grown every year. Trump understands numbers. He is correct, but his approch is wrong. Pick a Industry! Save it. Nuetralize the import/export bottom line. If we just do this one aspect, then, we can begin the long road back to stabilized prices and economy.  Peace.  

Market Turning?

- It's the darkest before the dawn

- Thomas Fuller

Tariffs In, Tariffs Out

President Trump's unusual technique for negotiating was on full display last week. "Liberation Day" lasted 24-hours. He changed tune to extend tariffs from being enacted for another 90-days except for China. He added their export bill by increasing the tab to 124% on all merchandise. In some instances, the tariff reaches 145%.  Then, on Saturday, he exempted Chinese exports of cell phones, computers and chips from tariffs. Then, we hear reprieve is temporary? Will we hear the Mama's and Papa's sing come Monday morning?

We stated last week that the market will act with uncertainty. It is up wildly one day only to crash the next. We were right. We are also correct in saying that we have been in a stealth recession since 2022. No one else agrees only you.You see it in the cost of home ownership or in a rental lease. You see it in the items that you want to buy like eggs. You see it in all of your insurance bills from home to auto to health. By the way, water is next. It is no wonder that we do not place trust in the media "experts."

We Suggested

That Trump needs a plan and works the plan. That plan should recognize that our debt problem is a result of importing everything from everywhere for over 50-years. You cannot change things overnight. PICK a TARGET! Work with Congress to protect that industry with the outlook of adding new fields after the first target is fully grounded. The plan may not be finished during your administration, but everyone will know and realize that you put us back on the right path. Now, the market...

Three Signs of a Bear Market

Keep in mind that the market is always biased to be bullish. You saw the whiplash last week to the upside after big down days. The bulls look for Trump to soften the tariffs. They also believe that the Fed will lower interest rates. This is their meme for a higher market. It is the status quo that is always protected. We see a possible bull flag that is extremely bullish forming, but it is too early to be sure.

On the flipside, the volume on down days is greater than the juice upward. The bear call pennant proved to be the right call. The price level is a long ways from the top. Down is the trend until something changes. However, volume in general is very high for both market directions. Uncertainty.

The bears find courage in market breadth. It is turning down. The bears also have Dow Theory on their side. All the indexes are going in the same direction, down. Harmony in the lower keys is a trademark of the Mama's and Papa's. Peace.

Alfa Target

                                                                           Two Warnings

Washington: Out first president and founding father expressed three warnings in his farewell address.                          He worried about sectionalism, which is putting local, geographical concerns over                                    national interest. This is not a major problem, but what is is the reality of red and blue                              states. The second warning becomes a prophecy. He feared, "Political Fractionalism."                              This is the rise in power of poltical parties. They could and Evolution says, have                                       undermined our republic. The final warning also becomes a prophecy. Washington did                             not want our nation to have foreign entanglements. He is not resting easy in his grave.

Eisenhower: We need to protect our nation, but the dangers of abuse between our government and the                           industrial/military complex needs to be watched. Another prophecy as the "Deep State"                           undermines our democracy.

Today

We have two great presidents that warned us and yet, we fell into the trap. Remember, it was the two political parties that pushed the lie of "free trade" which ended in outsourcing of our jobs and standard of living. Enter Trump. He is correct in his goal to bring back manufacturing. It will make us more self-sufficient and raise our standard of living. He forgets application. We got into this predicament over time. We cannot flip a switch and have it done over night. Trump needs to target areas. When he sees improvement, then, pick another segment to address. Then again, DOGE has only targeted low hanging fruit. It is sad that we end foreign aid, but reality cannot be denied. We have been living above our means. We have been abusing the privilege that our currency is the world's reserve. If we lose that, we become a third world nation overnight. We need to slash costs.

In every bureaucracy there is waste, fraud and abuse of power. By sun-setting them, we can step back and apply what is good in a new formation when we have the money. With that said, FEMA has been shut down. There were some good parts to the emergency agency. One of them is flood insurance.

What Now?!

There were 4.7 million policies under a program to offer flood insurance because private insurance was either unaffordable or not available. We can thank the Federal Reserve for destroying the purchasing power of our dollar in the cost for flood and all insurance and everything for that matter. Anyway, this translates into $1.7 trillion in liabilities. What will home owners in flood prone areas do? How much will they lose in property value? When there was not enough money to cover disasters, the National Flood Insurance Program (NFIP) would help. However, their program was short funded. They borrowed from the US Treasury. They owe $22.5 billion.   

There are other related problems like mortgages under Fannie Mae and other government backed mortgages. FEMA has learned many aspects to disasters. This data was passed along to state and local government. It helped in building plans and codes. Remember, no one can get a mortgage in a flood zone without flood insurance. Real estate will take a hit. 

We Suggest

That the federal government offer a national disaster insurance in partnership with any state that will buy-in to the program to help their citizens. The state will offer separate programs for renters and home owners. They will pay 50% of the premium and the federal government pays the other 50%. 

Now

DOGE needs to address the alfa waste basket, the military. They have been over-charging for years with brides, fraud and poor execution. The military gets the biggest part of our budget and they squander the most. You can see the results in every undertaking like the navy's new generation destroyer DDG. It will be $3.4 billion in overrun production. How about the new generation sub, the SSN. It could run $7.2 billion over estimate. How about the Air Force? There new B-21 bomber is way over its estimate and you could mention any F-series jet. They all cost more than projected. 

We Sugest

That in negotiating in military contractors that if they cannot produce what they said that they could that they eat the overrun. No ands, if or buts. Yeah, we know that the military branches want changes after the contract due to tech advancements. However, this reflects more on them with poor vision and planning. They spend money because it was appropiated and not with insight. 

Meanwhile, Market

The big drop will abruptly change course. We see a rally, but volume will dictate whether it is a bounce or the market has settled and digesting the tariff outlook. Ultimately, we see a test of the COVID low around 38,000. If it falls lower, uncertainty will follow...Peace.

Alert! Alert! = The market on Tuesday tried to rally, but reversed course mid-day. This piece is written on Saturday. The last sentence, (If it falls lower, uncertainty will follow) has emerged. There could be another rally attempt, but uncertainty will cause a failure. The stronger trend is down, but there are many resistance points along the path. Patience is the correct avenue.  

Is It Time to Invest in AI?

- Education is simply the soul of  a society as it passes from one generation to another.

- G. K. Chesteron

Talk is Cheap

All the talk, all the buzz centering on AI will find fools seeking easy riches. When you step back and think about progression within society, about the changes through innovation and technology, there is a natural path that shows the impact of that change. Consider the first cars or telephone service? It takes years to refine the product and reduce the costs so it is affordable by ordinary consumers. When those two aspects are achieved, sales within society will reach an inflection point. When that point is pierced, the real impact begins.

AI

It has not done anything other than fraud. We now have pretend characters that sound like the person who is being minicked. The real nuts and bolts is to have a program use the data in its banks to offer new and quicker responses, to find solutions to help humanity. 

At the moment, AI is beginning to find success in a few sectors of society. Keep in mind, that AI is just a version of a faster computer with the hope to create solutions. All the big players are investing. China's, Deep Seek is seeking to do the same thing. The model cannot reason, but it can do many math tasks and code tasks. Like all the big,Western tech firms, China is trying to find the chip with the answer. They have not yet found it. We believe that programmable chips will be the next step.

Gold Rush

Back in 1849 when gold was found in California, the area boomed. Most miners did not get rich. The people who did, never mined for gold. They sold shovels and picks. They sold tents and made a new longer lasting pants, Levi Jeans. My point is if you want to get into AI, buy Microsoft or Google. Follow the chips like Nvidia and Taiwan Semi. It will be less risky and maybe, you'll get lucky? You have to do your homework. Also, in a few years, someone could develop quantum computing and AI will never be mentioned again. 

Timeline

AI has been around for over 15 years. If you fell for the initial push, you took a big loss. The inflection point is still a long ways from reality. However in 2024, headway showed promise. The puzzle starts to assemble as models like ChatGPT, AI co-pilot, etc. emerged. What investors forget is one crucial point, energy and its cost. AI eats like a pig. Companies are trying different approaches. Will Microsoft get permission to restart Thee Mile Reactor for data? The company is already pulling back from investments in Europe. These things take time and a new problem has arisen. The Heathrow Airport fire at its substation. They need a large transformer, but it will take over a year to get a replacement. Transformers have a back-log. Utilities are behind the eight ball, especially in dealing with the grid. 

Pluses

There have been positive impacts in a few fields. The biggest has to be in movies and video games. Although the use of Generative AI is being applied by thieves with fraud, gaming and movies have used the platform to lower costs and the graphics aregettring better and better.

The other industry that stands out is healthcare and education. In healthcare, AI helps with documents. This lowers costs. AI tools are helping surgery and dianostics. Of course, fraud will appear in clinical studies, but the positive is in connecting ideas.

In education, AI can help in language, grammar and writing. We believe that all AI writing should have a disclaimer before any piece. 

Climate

It is in the early stages, but AI can connect data to help in weather forecasting. It can also be used to locate areas where wildfires can happen. We need to thin the threat. Wake up, Sierra Club! It is better to cut some trees than to have them burn. We use the wood to make housing cheaper. We grow new trees. 

Labor and Economy

Some skills can be done by robots. Dear Reader, this is AI. Sadly, AI will eliminate jobs. Government should sponsor repair technicians now, because everything eventually breaks. Estimates say that 25% of low skill work will be lost. If we prepare to repair automation, some of those lost jobs can become quality work.

Current Market

Whatever you decide to do, know this. You do not need AI to read and learn about charting. Last Friday, the charts revealed a bearish pennant pattern. The downtrend will continue. So, study stocks that you like or think will grow with AI because a down market will take everything with it. The INDU could test a low at 40,500. If it does, volume could indicate a further fall? Be patient! ...Peace.