The market is poised to break to much higher levels, but it’s still to early to pour oodles of money on the long side – just yet.
For one, there are major resistance levels overhead from here. Second thing to watch is whether “Sell in May and go away…” shows up this year. It really hasn’t, the past few years.
Then there’s the data. Federal Reserves Consumer Debt report (they mistakenly call it credit, because banksters are creditors while us’ns l’ill people are debtors. Wednesday, there will be producer price/final demand. And then Thursday we get the official Consumer Price Index.
Already, though, several things are more-or-less known. For example, when we look at the retail price of gasoline, we see this is $2.813 for regular. A year ago, it was running $2.35.
Taken as a single indicator – regardless of market numbers, Bitcoin hype ($9,300 this morning, BTW) or Fed rate babble, the gas price alone is up a whopping 19 percent compared with last year.
In a “normal” economy, this would have the precious metals, and anything not nailed down, going through the roof. But, these are far from “normal times.”
For one, people have lost faith generally, I’m afraid, in the ability of the central government to effectively govern.
I noted over the weekend that it seemed to me that John Kerry – former Obama democrat secretary of state, meddling in trying to “save the Iran deal” seemed a clear violation of the Logan Act that prohibits private persons from mucking up the works of Presidential policy with foreign nations.
Since we presume Kerry can read, we construe this as the democrats continuing to refuse to accept the election results from coming up on two-years ago.
I’m not the only one calling “Foul!” on the Obamanista efforts to undermine the duly elected government. Says the Washington Examiner “Alan Dershowitz: John Kerry would be violating the Logan Act if it was enforced.”
As many readers commented over the weekend, it’s proof of two things we are still deluding ourselves about. 1) We are NOT all equal under the law. There is a “ruling class” on both sides of the political aisle which is why Kerry’s obvious (to us) breach of law will go unpunished. 2) The Swamp is still very much full and even Trump’s lieutenants have neither the balls not skill to provide even-handed enforcement of cornerstones of democracy.
That, obviously, clouds the national mood, and with it outlook, and in ripple-through fashion, it impacts markets.
Toss in the increasingly militant Chinese putting cruise missiles onto their recently dredged-up islands and we’re still not sure how sincere the NorK’s are…toss in the secret nuclear weapons program of Iran and there’s not too much to give one confidence.
To be sure, there are still people forming families and buying homes, but even here, the national drive to monetize anything, including gender and sexual orientation has changed the dynamics of family creation.
The good news, such as it is, is that thinking Millennials may turn out to be a better crop of youngsters than the Gen-X;s; particularly when it comes to core values.
For example, take the UK Telegraph story “Millennials are turned off sex, study suggests, with one in eight still virgins at 26.”
Another one of Pappy’s old sayings is coming around: “When comes to sex, it’s not what you see,” he explained. “It’s what you THINK you see…”
In a world full of proselytizing orientation and gender-bender marketers, the viva la difference that older people “discovered” naturally between the 5th and 9th grades, has turned into a mass-monetizing festival replete with high dollar curriculum and text books.
Shove enough pictures of diseased genitals as people and (d’oh!) the “magic of sex” and mating is done. Calculus and programming suddenly look for appealing…so the brighter millennials are looking for something with substance and values.
While we KNOW that inflation is coming, what is less clear is whether there will be the one thing that matters – a rise in real disposable personal income.
According to the Federal Reserve Economic Data (FRED) data dispenser, real personal income has gone up about 19% in the past 10 years – like so:
Right? Up 19.14%.
But ask yourself “What was my out of pocket cost of medical prior to Obamacare?”
The problem with making plans for the emerging New World is that it is full of contradictions. Because, for example, when you look at the real cost of housing, we are still trying to crawl out ofo the mini-depression caused by the Housing bubble collapse a few years back:
Politicians (and co-opted economists) are not inclined to talk about such things. I have never found a reliable monthly study (other than running our own data sets on current dollar data and then adjusting for Fed published inflation factors).
The reason is simple: On a real disposable basis, there has been no big increase in the REAL purchasing power of working Americans.
And, as we explain every week over on the Peoplenomics side of the house, there’s not much hope of things improving. Which is why birth rates are falling: Young people are not stupid – they sense what’s coming.
It’s hard to put into words, but it’s the magic of compounding applied to debt that we can’t control – or, at least, don’t have the political will to do so.
Take a basic like education: The cost per child in a particular area might be on the order of $2,000 per year. But, that’s before the ever-increasing pension liability to fund teacher retirements. Which are (and have been) growing far faster than the basic cost of education.
As a result, not only do schools bump up tax rates every year, but “special bond issues” flower every year, as well. The result is soaring property taxes.
Roads and bridges are another one. At first, maybe a 10% gas tax could build a workable highway system in a given state. But, over time, the cost of operating went up (as did construction) and along with it, massive bureaucracies arose. Oh, and let’s not leave out all those state worker pensions which grow not only based on compounding, but also on the retirement rates as intergenerational turnover increases.
Did you realize just the Texas Department of Transportation budget is into the $70-billion plus range now? See here for the gory details..
The problem this exemplifies is that even with ALL that money, the bureaucrats have continued their empire building to such an extent that they have deemed it necessary to sell-off certain roads to private corporations which impose TOLLS and that’s just another form of TAX.
This is the kind of “systems collision” that the world is swimming in. It’s not going to get better, except in a genuine collapse.
BUT, the Bankster class has an ace they are placing now. They are betting that a controlled almost=hyper inflation will keep things going while they make a bundle.
That’s the basis of modern monetary theory: Pioneered as practicum in Zimbabwe’s inflation under Robert Mugabe, it was a painful experience for the country. Trillionaires were everywhere.
As Millennials look ahead, they are seeing through the fog of political and economic lies and they’re looking for another way.
But for this morning, here’s the horseshit the media serves up, instead:
And stop the press! Tutankhamun ‘secret chamber’ does not exist, researchers find.
This is not to say there isn’t REAL news.
Putin’s been sword in for a fourth term as Russian president.
The volcano on Hawaii is a mess.
And if you look up? The Sun’s going out:
As it does – and there’s talk in some circles of another Maunder Minimum (mini- Ice Age), the only investments that will make sense will be things like clothing, seeds, and energy sources. The one in the 1600 and 1700’s lasted about 75-years.
And that’s what the Millennials who think have to worry about on their radars.
With Dow futures up 87 with 45-minutes to the open, I will size things up about 10:45 to see which way the traders are running it. In the meantime, thing about the Maunder. Robert Felix’s book Not by Fire but by Ice: Discover What Killed the Dinosaurs…and Why It Could Soon Kill Us is still a must read.
Add to that Dark Winter: How the Sun Is Causing a 30-Year Cold Spell and you’ll see there are bigger issues for “the rock” than gender-counting.
Think food and ice….the real news is there if you look:
And the hits just keep on coming…
Find someone…and monetize them!
Moron on the ‘morrow!