2020

Financial, Economic and Social Mood Update (May 1, 2020) The subject of this month’s update is a follow-up to last month’s topic analyzing the emerging economic collapse and fallout from the global pandemic.  Much of the world’s economy remains intentionally shut down in an effort to slow the growth of the pandemic, and repercussions remain huge.  At least 100 countries have asked the International Monetary Fund (IMF) for a financial bailout.  In the USA, the annual federal government budget deficit exceeds USD $4 TRILLION and the official national debt has surpassed USD $25 TRILLION.  Keep in mind that the US national debt does not include “off balance sheet” unfunded liability items such as Social Security, Medicare and Medicaid, which in sum surpass the rest of debt.  The massive USD $2 TRILLION stimulus package has already been spent in the sense that so many people remain without gainful employment.  Business Insider estimates that fewer than half of Americans will have a paycheck in the month of May.  One in six Americans have already filed for unemployment benefits, and 40 percent of families have trouble putting food on the table.  In much of the rest of the world, especially in the very populous developing world, the situation is worse than this. These massive sums of money can never and should not be paid back for the simple reason that most of the world’s debt has been “created” out of thin air by the central banks of the world, which are owned by the world’s commercial banks, which in turn are owned by the most powerful families in recorded history.  The sum of money “printed” to date is astronomical, and a number of indebted entities are even deeper in the hole than the US federal government.  Who are they? European Union (EU) pension…

Financial, Economic and Social Mood Update (April 2, 2020) The subject of this month’s update is the worldwide coronavirus pandemic.  I am re-sharing a Facebook video which I have found extremely informative and helpful: https://www.facebook.com/jojo.borromeo.56/videos/1598183023671819/ The video was made by a medical doctor in the Philippines who is working on the “front line” of this very important battle.  He explains the need for quarantine, lock-down, social distancing and most especially the need to wear face masks.  We can even make our own masks using cloth (such as a handkerchief) tied with string.  The pluses of social distancing were proven 100 years ago during the worldwide Spanish influenza epidemic – political jurisdictions where social distancing was practiced significantly reduced the exponential growth rate of the pandemic.  Another point the doctor raises is that any epidemic will have to infect virtually every person on earth (most people will carry a disease but not become ill with it) to reach what is called “herd immunity.”  This is yet another reason for everyone to wear a face mask. Stock markets all over the world have lost a cumulative 23 percent since this crisis began.  The Dow Jones 30 Industrials Index has been down by as much as 39 percent from its record high nominal value 49 days ago.  Safewealth Group of Switzerland (which uses Elliott Wave forecasting techniques) has an eventual crash target level for the Dow Jones 30 Industrials Index of around 12,000 to 13,000. Many interest rates, including central bank key rates as well as some consumer CD savings rates (certificates of deposit) are now at zero or less.  The price of crude oil has collapsed by 86 percent since oil’s high value was reached in 2007-2008, and now hovers around USD $20 per barrel.  Some analysts believe that the price of…

Financial, Economic and Social Mood Update (March 1, 2020) The globe is in the midst of a lethal pandemic which may be seen as a “black swan” (i.e., unforeseen) event which is collapsing markets and economic activity.  The US stock market has lost 17 percent of its value since the historic nominal record of February 12.   Real property values in the hottest (largely coastal) US markets are down by 15 percent.  Interest rate yields are already at historic lows for all of recorded human history.  Central banks will likely intervene in the markets very shortly by making rates even lower (many rates especially in Japan & Europe are already negative).  As I have said in the past, this is the modern day version of “printing” worthless fiat currency.  The worthless markets & paper fiat currencies will likely be replaced by electronic digital currencies backed by real precious metals, largely gold bullion.  Remember that the supply of precious metals and crypto-currencies is limited, which means that their values will eventually skyrocket. The subject of the March 2020 update reverts back to politics.  Our world today is plagued by challenging times and societal unrest.  When conditions are not as good, people are less patient and more demanding with respect to correcting wrongs from the past and present.   The examples I will use to illustrate this come from southern Africa, but these examples can be and should be applied to the entire world.  The gist of this message is that the overwhelming mass of the “have nots” in the world must be invited & allowed to partake in the political & economic system before it is too late…………..the way global events are unfolding, it may already be too late.  In any case, the alternative to political & economic inclusion is a society at…

Financial, Economic and Social Mood Update (February 1, 2020) Nominal stock market and other major asset prices (i.e. real property) are at record high or fairly robust levels, but we must remember that the real purchasing value of most fiat currency has fallen dramatically – which makes nominal price records largely meaningless.  US equity prices are about 4 percent below their record nominal highs.  US real estate prices within the more robust regions (largely along the coasts) are roughly 12 percent below their record nominal values. The subject of February’s update returns to economics.  As we already too painfully know, the purchasing power of our money has declined tremendously, and it will continue to do so at an even greater rate compared to the past.  Furthermore, the income and wealth difference between the countries of the developed world and the countries of the developing world is getting smaller – a good thing which evens out the disparities of the past.  But interestingly, the income and asset value difference within certain countries especially in parts of the developed world are increasing at alarming rates.  Why is this taking place, and what does it mean? In the USA, the difference between the far more populated (and far more affluent) coasts and the much less populated & less affluent inland parts of America is becoming ever more pronounced.  These differences are noticeable as well within many of the 50 states.  The most affluent large metro areas in the USA include San Francisco-San Jose, Los Angeles, New York (including suburban New Jersey, Connecticut & Pennsylvania), Boston and the District of Columbia (including northern Virginia & suburban Maryland).  A good measure of cost and purchasing power is the salary required to purchase a home.  By this measure, the priciest metro area in the USA is…

Financial, Economic and Social Mood Update (January 1, 2020) Happy New Year 2020 to all! The asset markets reached yet more “nominal” highs in December 2019, driven largely by the Central Bank’s relentless creation of yet more credit out of thin air – the modern version of printing worthless money.  The volume of this credit is a staggering USD $10 TRILLION since the middle of September 2019, done to shore up dried up liquidity in the global banking market.  The economy is quite frankly no longer a “real” economy.  99 percent of purchases are made on credit, interest rates are at artificially low levels (often near or below zero), the overwhelming majority of the population receives some sort of financial subsidy and almost nothing is being produced (no production of physical goods).  The population continues to implode due to collapsing demographics, which spells disaster.  An imploding population translates into an inverted (i.e. upside down) population pyramid, spelling eventual disaster for economic growth, asset values, tax collection, pensions, insurance and banking. When the credit bubble does finally burst, expect asset values (the stock markets and real estate values) as well as the consumer economy (automotive purchases and everything else) to fall to zero. The subject of this month’s update is the progress with the International Thermonuclear Experimental Reactor (ITER), an all-important nuclear fusion power reactor located in Provence in southern France just 44 miles north of the coastal city of Marseilles.  Nuclear fusion power is the great promise of safe, efficient and affordable power generation for the future of the entire world, a source of power generation used by our sun and by all of the stars in the limitless universe.  35 countries representing 50 percent of humanity and 80 percent of global GDP are part of this huge project.  To…