In early September, shares in real estate, utilities, and consumer staples have emerged as top performers. Gold prices continue to rise, and government bond yields are on track for their most significant monthly decline since December, indicating a flight to safety as bond prices increase.

“It’s really been something to see,” said David Bahnsen, chief investment officer at the Bahnsen Group, commenting on the market’s rotation towards defensive assets.

Concerns surrounding the U.S. economy’s health, the potential scale of forthcoming interest rate cuts, and the upcoming November presidential election have led some investors to exercise caution.

The latest inflation report did little to alleviate these worries. Core inflation, which excludes the often-volatile food and energy sectors, came in slightly above expectations, prompting a sharp decline in stocks and bond yields before a late-day recovery.

Since early August, markets have struggled to maintain stability, particularly as some of Wall Street’s favored trades began to unwind and data indicated a potential cooling in the labor market. Major indexes have experienced significant one-day fluctuations, yet the S&P 500 remains only 2% below its July peak and has gained 16% year-to-date.

The once-dominant Magnificent Seven tech stocks have also seen a decline in momentum. Nvidia, for instance, has dropped 7% since its earnings report on August 28, despite posting quarterly earnings and sales that more than doubled—a growth rate that has slowed from the previous year’s rapid pace.

The recent market reordering has positioned the utilities sector in close competition with technology as the top-performing group in the S&P 500 for 2024, with both sectors up over 20%.

The Fed is widely anticipated to initiate interest rate cuts at its upcoming meeting. Investors believe that the unexpected rise in core inflation strengthens the case for a modest quarter-percentage point cut rather than a more aggressive half-point reduction. According to CME Group, the likelihood of a larger rate cut has decreased to about 15%, down from 34% earlier in the week.

As interest rates are poised to decline, the attractive dividend yields offered by defensive stocks become increasingly appealing. The real estate sector of the S&P 500 currently boasts a yield of 3%, followed closely by utilities at 2.9% and consumer staples at 2.2%.

“If you’re going to buy something that might have upside from an equity perspective, but it’s also going to give you money to sit and wait, it’s not a bad place to do it,” said Mark Hackett, chief of investment research at Nationwide.

Bank of America strategists have advised clients to increase their exposure to utilities and real estate, predicting these sectors will benefit from a lower interest rate environment due to their attractive dividends.

Defensive stocks, such as those in real estate, utilities, and consumer staples, are favored because consumers prioritize essential expenses like rent, utility bills, and household goods, even when they cut back on discretionary spending.

Gold has reached new all-time highs since March, driven by a surge in demand for safe-haven assets. Lower interest rates enhance gold’s appeal, as it does not yield income, making it more attractive compared to dividend-paying stocks and interest-bearing bonds. Gold prices have risen 23% this year, outpacing the S&P 500.

“We haven’t had to make the case for gold nearly as much as we’ve had to make the case for OUR gold,” said Jonathan Rose, CEO of Genesis Gold Group. “Retirees in particular have appreciated our faith-driven approach to rollovers and transfers of their retirement accounts into physical precious metals.”

The benchmark 10-year Treasury yield settled at 3.653% on Wednesday, marking the second-lowest level of 2024. Bond yields typically decline as prices rise, and investors often seek the safety of U.S. Treasurys during turbulent market conditions.

Meanwhile, the S&P Global Investment Manager Index’s risk appetite reading has dropped to its lowest level since May 2023. This monthly survey, which gathers insights from approximately 300 institutional investors, reveals concerns about valuations, political uncertainty, and recession risks.

Despite the current market dynamics, stocks appear historically expensive. The S&P 500 is trading at 21 times its expected earnings over the next 12 months, compared to its 10-year average of 18.

The pressing question for investors is whether the current surge in defensive assets is a temporary trend or the beginning of a new market regime.

“We’ve gone through a few of these headfakes, but we think this one is real because rates are going to start coming down,” said Emerson Ham III, senior partner at Sound View Wealth Advisors. “If you get a rally where you’ve got defensive names doing well but also technology performing on a fundamental basis, that’s kind of the best of both worlds.”

Warren Buffett, the legendary investor known as the “Oracle of Omaha” (and “Fireball” by his father), is famous for his smart investment choices. So when it was revealed that his company, Berkshire Hathaway, sold half its Apple shares, many investors were puzzled, trying to understand what it meant.

The number of Apple shares that Berkshire Hathaway has dumped is absolutely astounding.

It is being reported that close to 500 million shares were sold during the first and second quarters combined…

In the first quarter of 2024, Berkshire Hathaway sold over 100 million Apple shares, and in the second quarter, they sold an additional 390 million shares.

More recently, Berkshire Hathaway has been selling off Bank of America shares…

Warren Buffett’s Berkshire Hathaway (BRKa.N), opens new tab has trimmed its stake in Bank of America (BAC.N), opens new tab once again, making the total sales since mid-July nearly $7 billion.

The conglomerate, run by one of the world’s most revered investors, disclosed late on Thursday it sold 18.7 million shares of the second-largest U.S. bank between Sept. 3 and Sept. 5 to rake in roughly $760 million.

Buffett’s moves look quite savvy based on what has been happening so far this month. In fact, we just witnessed the worst week for the S&P 500 since March 2023…

The S&P 500 dropped Friday, notching its worst week since March 2023, as investors assessed the fallout from a weak August jobs report and ditched leading technology stocks.

Will this week bring even more pain?

Right now, investors are concerned that the economy may be slowing, and those concerns were bolstered by Friday’s employment report.

As Zero Hedge has noted, that report told us that the U.S. lost a whopping 438,000 full-time jobs last month…

Starting at the top, while the number of employed workers did rise by 168K, looking closer at the composition of this increase is disastrous: that’s because it consisted of an increase of 527K part-time jobs, offset by a 438K plunge in full-time jobs.

This means that since last June, the US has added just over 2 million part-time jobs, and lost over 1.5 million full-time jobs.

If you want a low-paying part-time job, it is still fairly easy to find one. But good paying jobs have been rapidly disappearing.  The president of a firm that finds positions for white-collar workers says that the market is in “bad shape” at this moment…

Economists largely agree that the labor market is “cooling,” but one recruiting industry veteran says that is a significant understatement.

Brian Howard is the founder and president of the Howard Group, a boutique search firm located in Overland Park, Kansas, that has been in business for more than 30 years, which companies hire to recruit candidates in an array of white-collar positions.

He said the job market is in “bad shape.”

I would say that “bad shape” is quite an understatement.

Earlier today, I came across an article about a man with an MBA that has been unable to find work even though he has applied for more than 1,500 jobs…

Marcial Quinones, 48, used to have few problems getting jobs in the 1990s without a high school diploma. Now, after what he estimates is over 1,500 applications since the early 2010s, he can’t land any stable job in his field even with an MBA.

Quinones, a father of four who lives in rural eastern Pennsylvania, said he’s struggled to land a long-term job in tech or counseling. He has held part-time positions and built his own inventory software to sell to companies, though he rarely gets interviews, even after redoing his résumé two dozen times.

There are so many people that are looking for work right now. For many Americans, low-paying part-time jobs just won’t suffice because the cost of living just continues to go up.

Thanks to the rising cost of living, the percentage of U.S. households with children that are “food insecure” has risen to a very alarming level…

Now, the inflation crisis under the Biden-Harris administration has intensified this issue even more. It was especially families with children that suffered during Covid-19 as school lunches disappeared and they have been hardest hit again in 2022 and 2023.

As Statista’s Katharina Buchholz reports, the USDA just published its latest report on the issue, showing that last year, almost 18 percent of households where children lived were food insecure, up from 17.3 percent in 2022 and 12.5 percent in 2021.

In a lot of those households, at least one adult is actually working.

But in many cases there simply is not enough money coming in to even cover the basics.

At this point, working Americans have so little discretionary income to spare that even dollar stores are really struggling…

Dollar Tree stocks plunged to a 9-year low earlier this week, after the chain delivered a disappointing earnings report.

Earlier this year, the company announced it would close 600 Family Dollar stores in 2024, after it struggled to integrate the chain into its business.

Dollar General, which is the biggest dollar store in the US and is located mostly in low-income, rural areas, also reported dismal sales last month and saw its stock plummet.

This is where we are at now.

And since our leaders simply refuse to stop wildly spending money, it is inevitable that the cost of living will just continue to go up.

Our standard of living is being absolutely eviscerated, and it is because of decisions that have been made by those in positions of power.

If our leaders had made different decisions, we could have gotten different results. But now tens of millions of U.S. households are deeply hurting, and much more pain is on the horizon.

Warren Buffett is clearly concerned about the short-term future. He has been dumping hundreds of millions of shares, and it appears that this could end up being one of the best moves of his entire career.

Michael’s new book entitled “Chaos” is available in paperback and for the Kindle on Amazon.com, and you can subscribe to his Substack newsletter at michaeltsnyder.substack.com.

Starbucks shares plummeted by 16% during the early cash session, approaching the -16.2% level last seen during the Covid crash. If intraday losses surpass 16.2% and remain above this level at closing, it would mark the company’s worst single-day loss since the Dot Com crash in early 2000.

“Starbucks reported what’s perhaps the worst set of results of any large company so far” this quarter, analyst Adam Crisafulli of Vital Knowledge wrote in a note. William Blair downgraded the coffee chain, citing last quarter’s “stunning across-the-board miss on all key metrics.”

Starbucks reported a 4% drop in same-store sales in the second quarter compared with the same period last year, while analysts tracked by Bloomberg were expecting growth. In China, same-store sales plunged 11%. The company’s top geographic segments are showing a pullback in consumer spending.

On Tuesday evening, CEO Laxman Narasimhan started the earnings call with investors by clarifying his unhappiness with last quarter’s results.

“Let me be clear from the beginning. Our performance this quarter was disappointing and did not meet our expectations,” Narasimhan said.

He said major headwinds originate from a “cautious consumer,” adding, “A deteriorating economic outlook has weighed on customer traffic and impact felt broadly across the industry.”

Here’s a snapshot of the second quarter’s earnings results (list courtesy of Bloomberg):

• Comparable sales -4%, estimate +1.46% (Bloomberg Consensus)
• North America comparable sales -3%, estimate +2.05%
• US comparable sales -3%, estimate +2.31%
• International comparable sales -6%, estimate +1.36%
• China comparable sales -11%, estimate -1.62% 
• Adjusted EPS 68c, estimate 80c 
• Net revenue $8.56 billion, estimate $9.13 billion
• Operating income $1.10 billion, -17% y/y, estimate $1.35 billion
• Adjusted operating margin 12.8%, estimate 14.5%
• Operating margin 12.8%, estimate 14.4%
• North America operating margin +18%, estimate +19.5%
• International operating margin 13.3%, estimate 15.2% 
• Channel development operating margin 51.7%, estimate 43.6%
• Average ticket +2%, estimate +2.41% 
• North American average ticket price +4%, estimate +4.15%
• International avg. ticket -3%, estimate +0.1%
• North America net new stores 134, estimate 144.33
• International net new store openings 230, estimate 429.23
• Comparable transactions -6%, estimate -0.27% 
• North America comparable transactions -7%, estimate -1.86%
• International comparable transactions -3%, estimate +1.37%

Goldman analysts Eric Mihelc and Scott Feiler told clients, “Expectations were for a clear sales miss and a modest EPS miss, but both came worse than the lowered bar.”

They added, “The miss was across geography and was as bad, if not worse, than worst fears.”

Other Wall Street analysts shared the same gloom and doom about the coffee chain (list courtesy of Bloomberg):

Deutsche Bank analyst Lauren Silberman cuts Starbucks to hold from buy 

• Says the “challenging” results was a sign “headwinds are more pervasive and persistent than we expected, and we have limited visibility into the pace and magnitude of a recovery”
• Had thought comparable sales deceleration in the US was more transitory and isolated to a specific cohort
•  However, with the decline in 2Q traffic and what seems to be limited improvement from Lavender and Spicy Refreshers, Silberman sees it being difficult to “underwrite a meaningful reacceleration,” which is key to the bull case

William Blair, Sharon Zackfia (cuts to market perform from outperform)

• After healthy demand over the past three years, Zackfia says the “tide has turned quickly,” with Starbucks posting the weakest traffic performance outside the pandemic or Great Recession
• China now “looks more fragile,” with comparable sales down 11%, and even Starbucks Rewards members “took a rare dip,” she adds

Jefferies, Andy Barish (hold)

• There was a “notable” miss on US and international comparable sales as well as EPS, and Barish says there is “no easy fix in sight to reaccelerate SSS near-term”
• Notes that international comparable sales was “similarly weak,” with traffic and comparable transactions both declining; China’s comparable sales miss and Middle East volatility more than offset positive comps seen in Japan, APAC and Latin America
• PT cut to $84 from $94

Citi, Jon Tower (neutral) 

• Starbucks is “putting a lot of oars in the water to try and paddle” its way back to a stable comparable sales outlook that investors would be willing to underwrite
• However, Tower expresses concern that there is not enough “coxswain keeping oarsmen working in unison/with accountability”; adds that it ignores the “true leak in the bottom of the boat,” flagging broad consumer pushback to cumulative transaction growth and the value equation
•  Notes China store margins are still in the double digits and the segment is profitable despite top-line declines
•  PT cut to $85 from $95

Cowen, Andrew Charles (hold)

•  “We believe 2024 guidance has been derisked as we model 0% NA comps & 3% EPS growth, the high end of the range”
• Expects shares to be in a “holding pattern” as Starbucks restores credibility while competition and tough macroeconomic conditions present headwinds
• PT cut to $85 from $100

Bloomberg Intelligence, Michael Halen and Jennifer Bartashus

• “Starbucks slashed fiscal 2024 same-store sales, revenue and EPS guidance and lacks a cogent plan to boost demand”
• “We believe several initiatives, including targeting overnight sales, dozens of new products and a four-week mobile- app upgrade cycle are overkill — a distraction unlikely to boost traffic”

On Tuesday, a similar story occurred at McDonald’s when the burger chain reported lower-than-expected quarterly sales growth.

Notably, working-poor consumers are pulling back spending in a period of stagflation (read here & here).

From door plugs ripping off Boeing jets to tires falling off, runway excursions, engine fires, hydraulic leaks, and pilot seat malfunctions, confidence in the planemaker has collapsed.

Just this week, The New York Times released a shocking report of a Boeing engineer turned whistleblower who revealed that sections of the 787 Dreamliner fuselage were improperly fastened together, posing structural integrity risks.

Next Wednesday, Senator Richard Blumenthal, a Democrat of Connecticut and the chairman of the Senate Homeland Security and Governmental Affairs Committee’s investigations subcommittee, will hold a hearing featuring the whistleblower to address concerns about the 787 Dreamliner.

The Boeing crisis recently led CEO Dave Calhoun to announce he will be stepping down later this year.

A crisis in confidence has spread to Boeing shares, down 61% since the peak of $440 in early 2019, around the time the first Boeing 737 Max crashed. In total, two Max jets crashed (March 2019 and December 2020), killing 346 people. The cause, as readers may recall, was a faulty flight stabilizing device called the “Maneuvering Characteristics Augmentation System.”

Since early Covid, shares have been bouncing between $95 and $269. Since the door plug ripped off the Alaskan Airlines 737 Max in early January, shares have slid from $264 to $170, or about a 35% drop in 3.5 months.

Bloomberg notes Boeing is the “second-worst performer on the S&P 500 Index” and is set to close down for the tenth consecutive session, putting it on track for its longest losing streak since November 2018.

The recent announcement that it delivered the lowest number of jets in the first quarter since mid-2021 added more gloom to the planemaker’s outlook. The 787 Dreamliner debacle could complicate things even more while Airbus deliveries soar and have recently been crowned the world’s aviation industry king.

“Boeing’s first-quarter delivery announcement confirmed what the market has come to accept over the past two to three months, which is that the pace of activity at its Commercial Airplanes segment is slow,” JPMorgan analyst Seth Seifman told clients in a note on Thursday.

Seifman said, “The path forward on production is not very clear, and while demand should allow for significant growth over time, investors should keep nearer-term expectations in check.” He also lowered the price target on the company but said his buy-equivalent rating would remain.

According to Bloomberg data, the average price target set by Wall Street analysts on Boeing dropped from about $275 in early January to about $234 this week. Also, the percentage of “buy” recommendations with analysts has declined.

Goldman has a buy recommendation with a 12-month $257 price target.

At what point is Boeing a buy again?

(DCNF)—American technology company Nvidia has shot up in value over the last several years following speculation about the potential economic impact of new computing technology that some investors believe could increase productivity substantially.

Nvidia posted huge year-end quarterly profits Tuesday evening, up 265% from a year prior as the company continues to grow at breakneck speeds, according to the company’s fourth quarter results. The fourth quarter gain beat expectations and led to a $277 billion stock rally on Wednesday, up 16.3% in just the day, making it the largest single-day increase in the New York Stock Exchange’s history, according to Reuters.

Investor hype around Nvidia is due to its stake in the semiconductor market, where it commands a vast majority of market share in artificial intelligence (AI) related technologies, experts told the Daily Caller News Foundation. Many investors predict that AI and greater computing efficiency will be a boon to businesses, which could greatly increase productivity using the technology for a wide array of applications.

“Nvidia has already made strides in increased efficiency, which is a tremendous advantage in this regard due to the sheer volume of calculations that must be performed to make a technology like AI possible,” E.J. Antoni, a research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the DCNF. “With the ability to position data centers virtually anywhere, size is not really a major issue anymore for chips, but efficiency is due to increased energy prices and environmental regulations. Being on the cutting edge of chip technology puts a firm in a position to truly command the market.”

Nvidia was first founded in 1993, introducing products related to 3D graphics, particularly for gaming and multimedia creation, and later invented the graphics processing unit in 1999, taking a big step for computing power, according to the company’s website. The company also claims to have sparked the era of modern AI in 2012, way ahead of trends around the technology, giving it a commanding lead on other technology companies that are now looking to catch up and expand into AI.

“Nvidia controls most (about four-fifths) of the chip market for AI-related technologies,” Antoni told the DCNF. “The explosion of demand around AI has boosted chip demand too, leading to growth forecasts for Nvidia that were completely off the table just a couple years ago. Like all stock prices, no one can say for sure if Nvidia’s current popularity is warranted because stock prices are speculation on future earnings, and the future is by definition uncertain. This is particularly true for AI, where so much of the potential is unknown.”

Nvidia’s stock price has exploded over the past few years, measuring less than $40 a share at the start of 2019, peaking at over $310 a share in November 2021, before sliding to around $127 a share in October 2022, ultimately climbing all the way to around $800 a share in February 2024, according to MarketWatch.

Nvidia breaks stock market record with a $247 billion one-day market cap surge, as reported by Bloomberg.

Renowned for AI & fast computing, #Nvidia hits a major financial milestone with its staggering revenue.

Stock up nearly 280% in the past year!#AI #Crypto #Stocks pic.twitter.com/Qv9aQ3LP14

— Christiaan (@ChristiaanDefi) February 23, 2024

“The fact that the demand for these products is growing indicates to me that our society, these companies, educational organizations, all the different users of AI believe that there is great value here that can improve our lives,” David Inserra, a fellow for free expression and technology at the Cato Institute, told the DCNF. “I can’t predict that it will certainly be that way. But every indicator that we have indicates that the market is saying there’s great value here. I think that we’d be foolish to ignore that important market indicator.”

Generative AI powered by the type of technology Nvidia is leading the way on is already finding several applications in business despite being in its infancy, including in customer service, cybersecurity, personal assistants, inventory management, accounting and more, according to Forbes. The U.S. is also looking to use semiconductor technology and AI in military applications and is trying to prevent China’s access to the equipment to maintain a technological and militaristic edge.

American companies controlled around 48% of the market share in the semiconductor market in 2022, compared to 7% in China, according to Statista. South Korea controlled the second-largest market share with 19%, followed by Japan and the European Union at 9%.

The Biden administration has placed a number of restrictions on the semiconductor industry to ensure continued American supremacy, including putting sanctions on several Chinese chip manufacturers in October 2022 to prevent them from working with American firms. Congress has also approved $39 billion in direct funding for chip manufacturers as part of the August 2022 Chip and Science Act.

The rollout of the funds has so far failed to bring a substantial number of chip manufacturing plants into operation, with several companies pushing back new plant completion dates to 2025 or later due to volatility in chip prices and government funding uncertainty.

The growth of generative AI powered by new chips has also led to concerns that the technology is being given a liberal skew, such as Google’s AI chatbot Gemini taking a nuanced position on the terrorist organization Hamas’ stance on the violent eradication of Israel and whether China is committing genocide against the Uyghur people.

Nvidia is part of what has been dubbed the Magnificent Seven Stocks, which are stocks that have delivered a large portion of stock growth in the past few years, according to Yahoo Finance. Tesla, an electric vehicle (EV) company, has had a similar meteoric rise starting slightly earlier but has since remained relatively stagnant in 2024 as other competitors in the EV field emerge, raising concerns that Nvidia might not live up to expectations.

“This is always the market dynamic, right? If someone comes along and delivers a more desirable product, well then yeah, sure,” Inserra told the DCNF about the potential for Nvidia to lose its current investor hype. “Right now we’re talking a lot about AI, but what if a new kind of AI, a better type or even more advanced, better type of technology emerges and uses different kinds of computing power? We don’t know what the future of innovation could bring. So to that extent, yeah, it’s possible that Nvidia isn’t going to be the golden child of this forever, but from what I’ve read, it seems like they have been forward-leaning and looking for ways to move into new spaces in the use of their processors for AI, and so right now they have that leg up.”

Nvidia declined to comment to the DCNF.

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Gold in SGD, AUD, EUR, CNH, JPY indexed to 100 – year-to-date

And it seems to have been working off an overbought condition over the last couple of years. If this was a flash in the pan thing for gold, it should have given back all its gains of 2020 on the back of Covid (as the Nasdaq has). Also note gold was already moving higher in 2019 way before Covid.

So it would seem to us that the COVID scam and the recent banking crisis/circus is just “fleas on a dog’s back” for gold — there is something “systemic” going on. The lack of trust on a global scale is revealing itself in gold.

We have a strong conviction that this is the tip of the iceberg (i.e. the upside of gold in multi-currency terms is a long way from being done).

Long term it would seem that the odds are in favor of gold outperforming the world stock market.

I know there is a lot to take in, and I’m going to show you yet another chart, but this is truly revealing.

Gold in SGD, AUD, EUR, CNH, JPY indexed to 100 – last 20 years

This takes us back to 2000 — 20-odd years ago. Multi currencies against the yellow metal indexed to zero. Is this not monetary debasement in a simple picture?

Obviously, it depends on where you take your time period from, but from 1990 the world stock market is up some 380% whereas gold is up 450%. So it could be argued that all the gains in the world stock market have been on the back of monetary debasement.

There is one key thing we left out in the chart above — the effect of compounding dividends. If we include dividends and assume they are reinvested, then the return of the world stock market goes to 710%, but around half of those returns are accounted for by monetary debasement.

Our thinking is that, longer-term (a 10-year view), holding a “whack” of your money in gold (physical or an ETF) in preference to the general equity market (or other growth orientated ETFs) isn’t a stupid idea and is actually a no brainer.

Are we on the verge of massive outperformance of gold relative to the S&P? Like the 1970s or even from 2000 to 2013? Well, stranger things have happened. Note that when gold gets going, the trends tend not to last for just a couple of years but rather 10 years at least.

Here is where things are far from being a no-brainer… What is going to outperform over the next 10 years or so? Gold or gold miners?

From 1983 to 2008, gold and gold miners tracked each other reasonably well. Then, from mid-2008 (the onset of the GFC), something happened and gold has outperformed miners dramatically. Sorry, but 1983 is as far back as the XAU (Philadelphia Gold Miners Index) goes.

Gold miners (XAU) and gold spot indexed to 1 as of 1983

Zooming into the period from mid-2008 until present, we can see in the chart below that gold miners have underperformed gold by some 70%, although they have moved in lockstep since the start of 2015 (eight years).

What is the reason for this underperformance?

Some say it is because of the increase in costs from energy. Yet, from 2008 until present, crude (a good proxy for diesel prices) has gone down relative to gold.

The contrarian in us suggests that we are approaching a time for gold miners to outperform gold. But we are lacking a fundamental reason for that genius idea.

Stacking up relative to the S&P 500 we can see in the chart below that the gold miners have performed more or less in line with the S&P 500 since the start of 2015.

And gold miners are as out of favor as they were during the height of the TMT/dot-com bubble of 2000.

In a nutshell:

• We don’t think it is going to be difficult to outperform the S&P 500 with a basket of gold miners over the next 10 years
• Whether or not you would be better off investing in gold miners or gold, toss a coin… or go 50/50 GDX and GLD — Newmont and Krugerrand or whatever tickles your fancy.

What else?

Is gold foretelling us of an impending monetary crisis?

Well, we do know one’s coming so…

Editor’s Note: The Western system is undergoing substantial changes, and the signs of moral decay, corruption, and increasing debt are impossible to ignore. With the Great Reset in motion, the United Nations, World Economic Forum, IMF, WHO, World Bank, and Davos man are all promoting a unified agenda that will affect us all.

To get ahead of the chaos, download our free PDF report “Clash of the Systems: Thoughts on Investing at a Unique Point in Time” by clicking here. Article cross-posted from International Man.

It’s important to know something up front. I have NOT been a “Chicken Little” who was screaming about economic collapse for years. I didn’t panic for Y2K. I didn’t panic during the economic downturn of 2008-2009. I didn’t freak out over Obamacare, at least not from an economic perspective. I believed that we could recover from the 2020 lockdowns. But by mid-2021 I finally started getting truly concerned and throughout 2022 I’ve been monitoring the nation’s economy very closely.

Now, I’m ringing the alarm bells because the threat of full-blown global economic collapse is real as we go into 2023.

On today’s episode of The JD Rucker Show, I covered several stories that highlight the dangerous trends we’re seeing. Unfortunately, the Biden-Harris regime seems bent on making things even worse and the new Republican majority in the House doesn’t seem willing or able to do much to stop it.

One of the prevailing stories giving people hope for the past couple of months is better-than-expected stock performance. Is this a sign that the tide is turning? According to Bloomberg and Zero Hedge, no. It’s just a sign that markets expected good things to happen. Since they haven’t, we shouldn’t anticipate a stock market that continues to overperform:

Two Great Months for US Stocks Promise Too Much for Own Good

The markets have been front-running the idea of a Fed pivot for some time now. While that is far-fetched, one must still admit that a Fed pause after its funds rate reaches circa 5%-5.25% is very much on the cards. While pretty much everyone in the markets is primed for the idea of a US recession, November’s non-farm payroll numbers (and perhaps even more importantly, the hourly earnings rising at twice the forecast pace) suggest that this inflationary episode may be around longer than realized.

And that is a worse denouement than any stock investor would wish. Not only do you have a scenario where inflation is corroding the nominal coupon on stocks, but you also have to factor in a slowing economy where presumably there is also a drag on earnings. A scenario that weighs on both the numerator and denominator (a high interest-rate recession) is hardly a prescription for a stellar rally month after month.

At current levels, the S&P 500 offers an estimated earnings yield of around 5.40% and the Nasdaq 100 around 4.32%, hardly anything to write home about in an environment where you can invest in two-year Treasuries that offer 4.27%.

Yes, there may be something to be said for being a part of that smart-money brigade that has made a grand return of 20%+ within a quarter and fleeing to where the honey is next, but that is predicated more on getting the timing right — an iffy proposition even with the most seasoned investors. For every one idea that works out as per plan, the nine that follow come a cropper. [read more]

Costco Reports Large-Scale Shortages as Essential Items Are Impossible to Find at Stores

On the second segment of today’s show, I turned to the “Epic Economist” to deliver a dose of reality about Costco. It’s a financial indicator some use to see what’s really happening with the supply chain and the retain market. Here’s a transcript followed by the individual video I played during today’s show:

The pantry of most American families today is probably looking a lot different than it was just a few months ago when grocery prices were lower and we still could find the majority of the products we usually rely on in our day-to-day lives. But now, shoppers are increasingly noticing the ongoing shortages at their favorite stores. With supply chain problems still impacting the production and delivery of goods, and mass migrations of employees searching for better wages resulting in labor shortages in the food sector, many of our favorite staple items are becoming harder to find. And that’s especially true at Costco.

In fact, new reports reveal that Costco warehouses are facing many different shortages, and dozens of products are about to be discontinued. Costco customers are getting more and more frustrated as they see essential items disappearing from the store’s shelves and start facing purchase limits once again. Today, we decided to track some of the most severe product stockouts and also expose which items may disappear next.

In recent months, American shoppers have been repeatedly reporting missing grocery items at their local Costco warehouse. But things seem to have taken a turn for the worse in October when several food products that were supposed to enter our food supply chains never arrived. We had a year of historical crop losses due to extreme weather conditions. The worst drought ever seen in this century resulted in some of the weakest harvest seasons in nearly five decades.

The scorching temperatures also led our beef cow herd to rapidly shrink, as farmers sent their animals to slaughter earlier than they typically do to prevent them from dying of thirst and starvation amid dwindling supplies of water and cow feed. You also probably heard about the avian flu epidemic, which is not only leading to shortages of chicken but also pushing poultry and egg prices to skyrocket The result of all of these losses is now being seen at the stores in the form of empty shelves.

Even major grocers like Costco are struggling to keep shelves fully stocked and announcing that in the coming months, many items will be discontinued. That’s why we decided to analyze data provided by Eat This, Not That, a leading news outlet in food, nutrition, and health, to track which are the most persistent grocery shortages at the retailer’s locations and what items are about to go out of stock.

The company just announced that dozens of products are being discontinued over the next few months. This means that your favorite treats may disappear from the store and not come back. A new report exposed that you may have to say goodbye to a wide range of treats that the retailer decided it will no longer sell. Knowing that some of your favorite items are going to be discontinued is one of the most disappointing experiences as a grocery shopper.

At the same time, it looks like purchasing limits are back with a vengeance. When searching the warehouse’s website for “limit”, we found dozens of items, ranging from active dry yeast at five per member, to almond flour at one per member, to acetaminophen at one per member, several types of wild canned tuna at one per member, mac and cheese at 10 per member, to soy milk at two per member, and many more. Retailers haven’t been able to catch a breath these days. The environment for most businesses remains tough, and as this downturn accelerates, they will continue to see their bottom lines getting hurt, and the same will be true for our personal finances.

Could 65 Trillion Dollars in “Hidden” Derivatives Cause the Entire Global Financial System to Crash?

If you thought that the collapse of FTX was something, just wait until the entire global financial system comes crashing down all around us.  Most people just assume that the system is being managed by rational people that behave in rational ways, but of course countless investors assumed the same things about FTX.  Sadly, the global financial system has slowly but surely been transformed into the largest casino in the history of the world.  It is a colossal Ponzi scheme, and once in a while authorities give us a little peek into what is really going on behind the curtain.

For example, this week the Bank for International Settlements released a report that warned that 65 trillion dollars in “hidden” currency derivatives could potentially be a major threat to the stability of the entire system…

There’s a hidden risk to the global financial system embedded in the $65 trillion of dollar debt being held by non-US institutions via currency derivatives, according to the Bank for International Settlements.

In a paper with the title “huge, missing and growing,” the BIS said a lack of information is making it harder for policy makers to anticipate the next financial crisis. In particular, they raised concern with the fact that the debt is going unrecorded on balance sheets because of accounting conventions on how to track derivative positions.

Last year, the total value of all goods and services produced in the entire world was just 96 trillion dollars.

So we are talking about an amount of money that is almost unimaginable. [read more]

The Bubble Economy’s Credit-Asset Death Spiral

Understanding why those in the financial industry aren’t ringing the alarm bell takes one simple revelation. Even as economies begin collapsing, THEY’RE still making plenty of money. The messes that are being made are mostly affecting the middle class. Even those with modest wealth are feeling the crunch. But the real money players are benefitting greatly. We discussed this a bit on the episode with an article by Charles Hugh Smith from Of Two Minds via Lew Rockwell:

Who believed that central banks’ financial perpetual motion machine was anything more than trickery designed to generate phantom wealth? Central banks seem to have perfected the ideal financial perpetual motion machine: as credit expands, money pours into risk assets, which shoot higher under the pressure of expanding demand for assets that yield either hefty returns (junk bonds) or hefty capital gains as the soaring assets suck in more capital chasing returns.

As assets soar in value, they serve as collateral for more credit. Higher valuations = more collateral to borrow against. This open spigot of additional credit sluices capital right back into the assets that are climbing in value, pushing them higher–which then creates even more collateral to support even more credit.

This self-reinforcing feedback of expanding credit feeding expanding valuations feeding expanding collateral which then feeds expanding credit has no apparent end. Modest houses once worth $100,000 are now worth $1,000,000, and nobody’s complaining except those priced out of the infinite spiral of prices and credit.

For those priced out of traditional assets, there’s NFTs, meme stocks and short-duration options. The credit-asset bubble-economy casino has a gaming table for everyone’s budget and desire to “make it big” via speculation, since the traditional ladders to middle-class security have all been splintered.

This financial perpetual motion machine distorts traditional incentives. Why bother renting a house bought for speculative gains? Renters are problematic, better to just let it sit empty and rack up huge capital gains. Count the lighted windows at night in all those new condo high-rises. Are even 20% occupied? Probably not.

This is how you get a “housing shortage”: investors would rather keep units clean and off the market rather than risk renting units. When credit and asset valuations are both feeding an infinite expansion, all that matters is leveraging capital to acquire as many assets as possible to maximize the gains from this self-reinforcing wealth-creation machine.

This machine also incentivizes fraud. To really maximize gains, why not borrow clients’ capital? Indeed, why not? But unbeknownst to the central bank sorcerers and the greed-crazed participants, all systems have limits and all consequences have their own consequences, i.e. second-order effects. There are many such dynamics which are eroding the apparently unbreakable financial perpetual motion machine. [read more]

Our Gold Guy

In the 4th segment, I replayed an interview with Ira Bershatsky from Our Gold Guy that I recorded last week. Here’s what he has to say on his website:

Look around. Things aren’t the way they should be. Between Pandemic Panic Theater, Ukraine, food shortages, and a push for Central Bank Digital Currencies, everything you’ve spent your life building and protecting is in jeopardy.

Precious metals are historically the most reliable and safest hedge against economic turmoil. With the Biden regime and globalists enhancing the chaos, it’s important for patriotic Americans to take control of their financial future.

Ira Bershatsky offers consultations to those who want to invest in precious metals. During these consultations, he will match your current financial situation with the best physical precious metal purchases whether you want to rollover your IRA or have coins discreetly shipped to your home. You will not talk to a telemarketer or sales rep. You will talk to a true expert in precious metals with decades of experience helping people protect and advance their wealth.

Central Bank Digital Currencies With Brannon Howse and Congressman Glenn Grothman

The fifth segment had me turning to my good friend Brannon House and his interview of Congressman Glenn Grothman:

The Biden-Harris Regime Quietly Changes Rules to Incentivize Financial Advisors to Put Your Money Into Woke Investments EVEN IF IT LOSES MONEY

It’s no secret that the Biden-Harris regime and their puppetmasters among the globalist elite cabal absolutely hate us. They despise us as useless eaters who must be depopulated or controlled for them to achieve their nefarious goals of The Great Reset, the 4th Industrial Revolution, Build Back Better, the Green New Deal, the Liberal World Order, or whatever label they slap on their machinations in the future.

Now, they’re proudly declaring this hatred by prompting financial advisors and retirement institutions to move your money to ESG companies. Moreover, they lifted rules requiring them to try to make you money. In other words, they can lose money for YOU and still make money for themselves as long as they’re investing in wokeness. You can’t make this up, but apparently someone among the powers-that-be did anyway.

According to Jeff Murdoch at The Washington Times [emphasis added]:

The Biden administration has quietly finalized a rule allowing employers to funnel workers’ 401(k) funds into investments that support woke causes that address issues such as climate change and diversity.

The Labor Department recently approved the rule affecting roughly 150 million workers and $10 trillion in assets covered under the Employee Retirement Income Security Act of 1974.

The rule says asset managers and retirement plan administrators should consider environmental, social and corporate governance (ESG) factors when selecting investments. That would encourage money managers to balance financial returns with investments that support wind and solar energy or have diverse boards of directors.

The rules also remove a restriction blocking employers from using an ESG fund as a default option for workers automatically enrolled in 401(k) plans. That means workers could be supporting causes that don’t align with their political views.

It also rescinds Trump-era regulations that require retirement plan administrators and asset managers to choose investments based solely on participants’ financial interests.

This is just another reason why I STRONGLY recommend everyone of all ages move their wealth or retirement into a self-directed IRA. Don’t let advisors and retirement companies quietly compel you to lose money on woke investments even as they make more money thanks to the Biden-Harris regime’s priorities.

Anyone who started investing after the crash of 2008 probably has zero concept of how markets are supposed to behave and what they represent to the rest of the economy. They have never seen stocks move freely without central bank interference and they have only witnessed brief glimpses of true price discovery.

With each new leg down in markets one can now predict every couple of months or so with relative certainty that investor sentiment will turn to assumptions that the Federal Reserve is going to leap in with new stimulus measures. This is not supposed to be normal, but they can’t really help it, they were trained over the past 14 years to expect QE like clockwork whenever markets took a dip of 10% or more. The problem is that conditions have changed dramatically in terms of credit conditions and price environment and it was all those trillions of QE dollars that ultimately created this mess.

Many alternative economists, myself included, saw this threat coming miles away and years ahead of time. In my article ‘The Economic End Game Continues’, published in 2017, I outlined the inevitable outcome of the global QE bonanza:

“The changing of the Fed chair is absolutely meaningless as far as policy is concerned. Jerome Powell will continue the same exact initiatives as Yellen; stimulus will be removed, rates will be hiked and the balance sheet will be reduced, leaving the massive market bubble the Fed originally created vulnerable to implosion.

An observant person…might have noticed that central banks around the world seem to be acting in a coordinated fashion to remove stimulus support from markets and raise interest rates, cutting off supply lines of easy money that have long been a crutch for our crippled economy.”

The Fed supports markets through easy money that feeds stock buybacks, and it’s primarily buybacks that kept stocks alive for all these years. It should be noted that as indexes like the S&P 500 plunged 20% or more in in the first six months of 2022, buybacks also decreased by 21.8% in the same time period. That is to say, there seems to be a direct relationship between the level of stock buybacks and the number of companies participating vs the decline of stocks overall.

And why did buybacks decline? Because the Fed is raising interest rates and the easy money is disappearing.

If buybacks are the primary determinant of stock market prices, then the participation of individual investors is mostly meaningless. Stocks cannot sustain on the backs of regular investors because regular investors don’t have enough capital to keep markets afloat. Companies must continue to buy their own shares in order to artificially prop up prices, and they need cheap Fed money to do that. Stocks are therefore an illusion built only on the whims of the Fed.

And the reason for the Fed’s dramatic shift away from stimulus and into tightening? One could argue that it’s merely the natural end result of inflationary manipulation; that central banks like the Fed were ignorant or arrogant and they weren’t thinking ahead about the consequences. Except, this is false. The Fed knew EXACTLY what it was doing the whole time, and here’s the proof…

Way back in 2012 before Jerome Powell became Fed Chairman, he warned of a market crisis if the central bank was to hike rates into economic weakness after so many years of acclimating the system to easy money and QE. During the October 2012 Fed meeting Powell stated:

“…I think we are actually at a point of encouraging risk-taking, and that should give us pause. Investors really do understand now that we will be there to prevent serious losses. It is not that it is easy for them to make money but that they have every incentive to take more risk, and they are doing so. Meanwhile, we look like we are blowing a fixed-income duration bubble right across the credit spectrum that will result in big losses when rates come up down the road. You can almost say that that is our strategy.”

In other words, Powell and all other Fed officials knew ten years ago what was going to happen. They knew that they were creating a massive financial bubble and that when they raised rates that bubble would collapse causing serious economic damage. Yet, they kept expanding the bubble, and now with Powell as chairman, they are popping the bubble. No one honest can claim that the central bankers were “blind” or ignorant. This is an engineered crash, not an accidental crash.

If the crash is deliberate then it is a means to an end, and there is no reason for the Fed to intervene to save markets at this time. Some people will argue that this puts a target on the Fed as a saboteur of the economy, and they wonder why the central bankers would put themselves at risk? Because they have a rationale, a way out, and it’s called “stagflation.”

Price inflation coupled with negative GDP is the basis for a stagflationary environment. The only other factor that is missing in the US today is rising unemployment, but this problem will arrive soon as numerous companies are slated to start layoffs in the winter. Stagflation is the Fed’s perfect excuse for continuing to raise interest rates despite plunging stocks. If they don’t hike rates then price inflation runs rampant and GDP declines anyway. If they return to QE then an inflationary calamity ensues.

In order to “save us,” they have to hurt us. That’s the excuse they will use.

It’s a Catch-22 event that they created, and I believe they created it with a purpose. But let’s imagine for a moment that the Fed has the best interests of the economy at heart; would a pivot back to QE change anything?

Not in the long run. Rising inflation is going to crush what’s left of the system anyway. Supply chain problems will only get worse as costs rise. To return to stimulus would indeed put a target on the central bankers. It’s better for them to pretend as if they are trying to fix the problem rather than continue with policies that everyone knows are draining pocket books.

Stocks saw a brief rebound this past week for one reason and one reason only – Rumors of a Fed pivot were spread and investors were hoping for a stop to rate hikes or a glorious return to stimulus measures. We will see many short rebounds in stocks like this over the next year, each one initiated by rumors of a reversal in policy. It’s not going to happen.

Will the Fed stop rate hikes? Sure, probably when the Fed funds rate is between 4% to 5%. Will that mean a reversal is on the horizon? No, it won’t. And it won’t mean that the Fed is done with rate hikes. They could start hiking again a few months down the road as price inflation persists.

Will the Fed return to QE? I see no reason why they would. Again, they are fully aware of the damage they have done with the QE bubble and the popping of that bubble. They would not have hiked rates in the first place unless they wanted a crash.

Consider this: What if the goal of the Fed is the destruction of the middle class? What if they are using the false hopes of small time investors in a return to QE? What if they are luring investors into markets with rumors of a pivot, tricking those investors into pumping money back into markets and then triggering losses yet again with more rate hikes and hawkish language? What if this is a wealth destruction steam valve? What if it’s a trap?

I present this idea because we have seen this before in the US, from 1929 through the 1930s during the Great Depression. The Fed used very similar tactics to systematically destroy middle class wealth and consolidate power for the international banking elites. I leave you with this admission by former Fed Chairman Ben Bernanke on the Fed’s involvement in causing the Great depression through rate hikes into weakness…

“In short, according to Friedman and Schwartz, because of institutional changes and misguided doctrines, the banking panics of the Great Contraction were much more severe and widespread than would have normally occurred during a downturn.

Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve. I would like to say to Milton and Anna: Regarding the Great Depression. You’re right, we did it. We’re very sorry. But thanks to you, we won’t do it again.” – Ben Bernanke, 2002

Is the Fed really sorry? Or are they just repeating the same strategy they used 90 years ago while acting as if they are unaware of the eventual outcome?

Editor’s Note: We strongly recommend that Americans who want to protect their wealth or retirement with precious metals should consider buying from America First gold and silver companies instead of any of the vast majority who are donating to Democrats and/or affiliated with proxies of the Chinese Communist Party. Here are two we recommend.

Image by Thomas Hawk via Flickr, CC BY-NC 2.0. Article cross-posted from Alt-Market.

The widespread selling that we saw on Tuesday was more than just a little bit frightening.  The Dow just kept plunging throughout the day, and the S&P 500 and the Nasdaq actually performed even worse than the Dow did…

The Dow Jones Industrial Average slid 1,276.37 points, or 3.94%, to close at 31,104.97. The S&P 500 dropped 4.32% to 3,932.69, and the Nasdaq Composite sank 5.16% to end the day at 11,633.57.

Just five stocks in the S&P 500 finished in positive territory. Tech stocks were hit particularly hard, with Facebook-parent Meta skidding 9.4% and chip giant Nvidia shedding 9.5%.

This was the worst day for stocks since the early days of the pandemic. But one bad day does not make a crisis.

Hopefully tomorrow will be better. But when you compare the current behavior of the stock market to how it behaved just prior to the crash of 2008, the similarities are astounding.

If you doubt this, just check out this chart.

It certainly isn’t going to take much to spark a massive rush for the exits.  If a bad inflation number can cause the sort of stampede that we witnessed on Tuesday, what would happen if we received some really bad news?

Not that I am downplaying the severity of the inflation report.  Consumer prices have now been going up for 27 months in a row, and what is happening to food is especially alarming…

The Consumer Price Index (CPI) report released today by the Bureau of Labor Statistics showed that prices on all items in the United States increased by 8.3 percent from August of 2021 to August of 2022, with the price of gasoline rising 25.6 percent, the price of electricity rising 15.8 percent and the price of food rising 11.4 percent.

The report indicated that the 11.4 percent year-to-year increase in the price of food was the highest in 43 years.

If you have been to the supermarket lately, you already know that food prices have risen to very painful levels.

And some of our most important staples such as milk, flour and eggs are leading the way…

Americans browsing the supermarket aisle will notice most food items are far more expensive than they were a year ago. Egg prices soared 39.8%, while flour got 23.3% more expensive. Milk rose 17% and the price of bread jumped 16.2%.

Meat and poultry also grew costlier. Chicken prices jumped 16.6%, while meats rose 6.7% and pork increased 6.8%. Fruits and vegetables together are up 9.4%.

The “experts” at the Fed don’t seem to understand that hiking interest rates won’t fix this.

We are in the early stages of a historic global food crisis that is going to be with us for a long time to come.  The biggest reason why food prices are increasing so aggressively is because there simply isn’t enough supply.

So the Fed can try to hammer demand as much as it wants, but people are still going to have to buy food and hiking interest rates is not going to help us produce any additional food. If anything, higher rates may put a damper on food production.

This is a totally different environment from the early 1980s, and those that believe that higher rates will tame inflation like they did back then are just being delusional.

But just like we saw back in 2008, higher rates will crush the U.S. housing market and the economy as a whole.

During a recent interview, billionaire John Catsimatidis asked the Federal Reserve to stop raising rates because if we stay on the path that we are on it will “destroy the rest of the country”…

So I call upon the Federal Reserve…If we keep raising interest rates, we’re going to destroy the rest of the country.

Somebody has to stand up and say it doesn’t have to happen. And they’re going to destroy the rest of the country. And there is a recession, it could turn into a depression.

Are you willing to go through an economic depression just to get the inflation rate back down to acceptable levels?

If not, that is too bad, because the Federal Reserve is not accountable to you.

And we are already starting to see signs that higher rates are having a really negative impact on hiring plans…

Based on the latest data from U.S. small businesses (SMBs), the demand for labor has declined again, with nearly two out of every three (63%) putting their hiring on hold because they can’t afford to add staff, and 10% of that group is laying off workers.

This decline is quite significant, as it’s 18% higher than it was in July (at just 45%). Beyond that, the percentage reducing their staff jumped 6% to 10% this month from just 4% in July.

Just like in 2008, vast numbers of Americans will lose their jobs in the months ahead.

Are you sure that your job is secure?

Economic conditions are rapidly deteriorating all around us, and our short-term problems could get a whole lot worse if 100,000 railroad workers decide to initiate a work stoppage on Friday…

President Biden and senior administration officials are working with others in the transportation industry, including truckers, shippers, and air freight, for “contingency plans” if a rail shutdown materializes at the end of the week, a White House official told Bloomberg.

The administration is trying to understand what supply chains could be disrupted the most — and how to utilize other forms of transportation to ensure commodities and consumer goods continue to flow across the country.

More than 100,000 railroad workers could walk off the job on Friday if freight-rail companies and unions don’t reach labor agreements.

Let us hope that such a work stoppage can be avoided.

But even if it can, there is no short-term hope on the horizon.

Our current crop of leaders is the worst in all of U.S. history, and they have us on a path that leads to national economic suicide.

So many of us have been pleading with Fed officials to stop raising rates, because higher rates will absolutely cripple our economy.

Unfortunately, they don’t really care what any of us think, and they have made it quite clear that more extremely foolish rate hikes are dead ahead.

I would encourage you to brace yourself for a full-blown national economic meltdown, because that is precisely where the Fed’s policies will take us.

***It is finally here! Michael’s new book entitled “7 Year Apocalypse” is now available in paperback and for the Kindle on Amazon.***

About the Author: My name is Michael and my brand new book entitled “7 Year Apocalypse” is now available on Amazon.com.  In addition to my new book I have written five other books that are available on Amazon.com including  “Lost Prophecies Of The Future Of America”, “The Beginning Of The End”, “Get Prepared Now”, and “Living A Life That Really Matters”. (#CommissionsEarned)  When you purchase any of these books you help to support the work that I am doing, and one way that you can really help is by sending digital copies as gifts through Amazon to family and friends.  Time is short, and I need help getting these warnings into the hands of as many people as possible.

I have published thousands of articles on The Economic Collapse Blog, End Of The American Dream and The Most Important News, and the articles that I publish on those sites are republished on dozens of other prominent websites all over the globe.  I always freely and happily allow others to republish my articles on their own websites, but I also ask that they include this “About the Author” section with each article.  The material contained in this article is for general information purposes only, and readers should consult licensed professionals before making any legal, business, financial or health decisions.

I encourage you to follow me on social media on Facebook and Twitter, and any way that you can share these articles with others is a great help.  These are such troubled times, and people need hope.  John 3:16 tells us about the hope that God has given us through Jesus Christ: “For God so loved the world, that he gave his only begotten Son, that whosoever believeth in him should not perish, but have everlasting life.”  If you have not already done so, I strongly urge you to ask Jesus to be your Lord and Savior today.

Article cross-posted from The Economic Collapse Blog.

Nothing could be further from the truth. I wish there wasn’t such a need for people to protect their wealth or retirement with precious metals. That would mean the economy is humming again as it was under President Trump. Until the middle of last year, we did NOT pick up a precious metals sponsor despite over two dozen sponsorship offers. I never allow products that are not needed by America First patriots to become sponsors here. Today, it is clear that precious metals are a necessary hedge. With that said, here’s Mike Adams…

The Fed raised interest rates by 0.75% today (75 basis points), fulfilling their promise to attempt to reverse the runaway inflation that they caused in the first place by printing trillions of dollars and flooding the markets with cheap or nearly-free funds (zero percent interest rates, for example).

As of right now, America’s real estate bubble is now in the process of a catastrophic collapse. The stock market is collapsing and the crypto universe is absolutely imploding. “The crypto apocalypse is here,” writes Michael Snyder from End of the American Dream:

Over the last seven months, we have witnessed a cryptocurrency collapse that is so epic that it is truly difficult to put it into words… approximately two-thirds of the value of all cryptocurrencies has already been wiped out.  Some are calling this a “crash”, but the truth is that this is the sort of full-blown “collapse” that so many have been warning about for such a long time.  A lot of crypto investors are now deeply in the red, and the outlook for the months ahead is very bleak.

Meanwhile, the average stock portfolio is down 31% this year alone, and the downside still remaining now looks like a deep, ominous chasm of financial devastation that’s going to suck the vast majority of American into financial destitution.

You see, while everybody’s assets are plummeting, the prices of the things they need to buy keep skyrocketing.

Everything people own is going to collapse in value, while nearly everything people buy is going to double or triple in price.

The real estate bubble will now collapse, however, which may offer some relief for those trying to rent or purchase new homes. But for the tens of millions of people already locked into bubble-priced mortgages and rent contracts, the pain of paying too much won’t be easily reversed.

The truth is that most assets have been Ponzi schemes for many years or even decades. The stock market hasn’t operated from fiscal reality since the 1980s, and the fiat currency dollar has been living in a delusional fairy tale land since Nixon took it off the gold standard in 1971.

The real estate asset price explosion was just an expression of low interest rates and cheap money, while the crypto universe was a grand social experiment that primarily served as a new generation’s “dot com bubble” where they ultimately learn an expensive (but valuable) lesson in the seduction and false promise of seemingly becoming wealthy without work. Too many crypto pioneers thought they could recreate the laws of economics by simply claiming absurd things that aren’t true, like “we don’t need intrinsic value, our token is backed by an algorithm.” That’s the crypto equivalent of the biological fantasy that claims “men can get pregnant,” which is why I call the crypto Ponzi schemes “financial transgenderism.”

See, what we’re all really beginning to experience in the world right now is a heavy dose of reality.

Learn more in today’s Situation Update: Brighteon.com/e450a1bf-8a5e-433b-aed5-7839e4210c19

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