The IISM Manufacturing Index and fresh Construction Spending are likely to influence the market very short-term today, but there are three socioeconomic questions that are much more important than, oh, even a pending Boeing layoff in the Seattle area coming shortly, says the rumor mill…
- Can the Economy “paper-over” the collapse of underlying values?
- Who’s behind the current attack on the [World]?
- Does this all lead to World War III?
Short Answers: For a while, Global Elites, and yes, unfortunately.
“The News” spewed all over the dumb sheep like so-much data vomit, has little to do with these larger – life-changing dynamics – so buckle up, breathe deeply…then read on.
Fed: Hyperinflation is Showing
Every week, the US Federal (though it’s not) Reserve, issues its H.6 Money Stocks Report. This reveals to the knowledgeable investor what’s really going on in markets. Because when the money supply is UP, then the nominal price of stocks is more inclineed to head up.
Pretend you just poured a glass of milk. As a liquid, it has “intrinsic value” to a human. A little calcium, a few nutrients, and water. Check.
Along comes the old man (me) with $5 bucks. I offer to buy the milk for 5-bucks and you readily sell it since you’ve got another half-gallon in the fridge. Everything’s a Business Model and you’ve learned it well…
Along comes the old man (me) with $5,000 bucks. I offer to buy the milk only this time for $5,000-bucks and you readily sell it since you’ve got another half-gallon in the fridge. Except, you’re now delirious, thinking me a fool. EBM, right?
Except (as you will learn) I am NOT. Because regardless of the price in dollars, the intrinsic value of the milk is unchanged!
Seems simple enough, right? Except it works with the stock market the same way.
If there is $50 dollars chasing each share of a stock the price will magically be drawn toward $50 bucks. If there’s zero unallocated dollars around, prices will come down. And surely, the Federal Reserve would look bad if the economy collapsed. So here’ss what they are doing: Hyperinflation.
See the M1 number? The Fed is jacking-up money (cash and equivalents) at a greater than 30% annual rate. Which, dear reader, is hyperinflation incarnate.
So, if the stock market should have normally have dropped by now (if there were any non-manipulated “free markets” left – and good luck finding any of those) to only 75% of it’s all-time high. Ergo, throwing 30% more money at the market would drive it back up. Whee!!! This is what has been going on since March when collapse came into view.
The Fed – already at zero interest rates effectively – can’t lower any more, but they can print like hell and worry about the results and blow-back somewhere down the road. When all that pent-up money begins to move, prices will go Weimar.
The M2 Velocity Crash
Were there still competent financial reporters in the world (another “ good luck with that one…“) the ONLY story in the MainStream today would be about be the following chart because this is what will lead to war, likely with China, likely over Covid-19, and likely in 4-5 years.
Of course, you don’t have to wait since Futures Tumble, Dollar Surges After Trump Threatens To Restart China Trade War
Velocity of Money at M2 HAS NEVER BEEN THIS LOW. (At least in our lifetimes.)
Velocity is the “turn-over of money.” There is HUGE power in money…but only when it is spent. Money not-in-motion doesn’t create work or wealth . It sits there dead…and we call it “dead pools of capital.” Collapsing velocity reveals the dire Fed fact that the government is pushing on a wet noodle. Because in the present environment, they can print all-day long…trying to jack up prices and get some economic activity going. But, the dark pools of capital don’t like risk…especially in uncertain times. And these are what?
Virus: Uncertainty Prior to War
As I explained a while back, China IS going to reunify with Taiwan. That means America will lose what precious-little of our ability to remain an autonomous country we have left. Which is why Trump’s Make America Great Again is really codee for Make Things Here or Perish.
Realizing opportunity, the Global Socialist-Bankster Alliance is now headlong into attack mode. And they’re doing it by attempting to “Divide America Against Itself.”
Oh, and it’s working.
Because most people are too dumb to question the New York Times which has been – in our unerring view – on the corporate side of China relations for a long time.
Dividing and Conquering
The depths of editorial misjudgment is AMAZING. You can see this in how the Chinese press (Xinhua) deferentially quotes the Times: when attacking Donald Trump:
What strikes us as just damn curious is that such stories leave the impression that Trump and Mike Pompeo pressing the inteel club for hard answers is somehow bad. Out here in fly-over country, looks to us that’s their job.
But, in the international power game, this “manufactured dissent” in America leaves China writing in Xinhua today that :
“- White House’s ill-disposed bid to blame the WHO, as well as its tactics of pressure and coercion, have exposed once again its long-standing hegemonic mindset, which seeks to put “America first,” even though doing so could hurt the common interests of the world.
– Since the United States is the institution’s largest donor, U.S. politicians believe that the UN health body should only act on behalf of Washington’s interests.
– U.S. politicians have simply slapped their own faces when attacking the WHO for so-called cover-ups…”
Meantime, president Trump claims the virus came from Wuhan “Trump claims to have evidence coronavirus started in Chinese lab but offers no details.” Which then allowed ultra-liberal CNN to frame things this way: “Trump contradicts US intel community by claiming he’s seen evidence coronavirus originated in Chinese lab.”
Oh, but the “inteel community” seems to include former – e.g. Obama – types and who knows where they stand.
Then to tighten the noose by the press is trying to string up, along comes the Washington Post through its syndicated papers trying to make Trump look the fool repeating the Chinese mantra that there’s “No evidence that deadly bat virus escaped Wuhan lab.” Oh? The lady doctor stealing bugs…where’d those inconvenient facts get mislaid?
What further complicates this murky mess is that the fellow heading the Office of the Director of National Intelligence is a nominal republican, appointed by Trump. But, there are republicans and there are republicans. Looks to us like this one supported McCain and Romney. Which leads us back to the “What’s the Deep State doing in all this…???” question.
It’s a complicated stew. We can look at the media and see the very evident antii-Trump bias. And, looking at “story flow” we’d love to be able to collect phone records between the “six corrporation owned” national media firm’ed ediitors to review just how much of the attack and cozying up to China is really going on and if there’s coordination….
That the CV-19 “went wild” from Wuhan, though, is not even open to debate based on evidence we’ve been able to inspect. What IS debatable is whether there was intent at any stage. And with competing corporate media, all feeding their own masters with their agendas, and with many stripes of “republicans” iin the mix, it’s increasingly problematic to “take a position” due to information “shading” by everyone in the mix.
Given the propensity of the “national media” to hide agendas behind “sources” – unnamed, of course – the murkiness grows.
Now throw in a Federal Reserve trying to save hedge funds and preserve a lifestyle…well, you can see how complicated the cross-currents are.
Our main take-outs of this morning?
- Hyperinflation is here, but non-apparent because the made up money isn’t going into the public’s wallet. It’s going to the Fat Cats bank accounts and sitting there. Which causes…
- The Velocity of Money has hit lifetime lows. Leaving us with?
- Trump’s still trying to sort out whether China iintended Wuhan as a “first-strike” and Trade retribution could follow.
While this goes on, we scan the headlines to see what pretext China will use in order to begin its assimilation of Taiwan, which we reckon to be the next big puzzle piece going into play. With the virus impacting our military, this could be the window.
Headlines like “China threatens to halt medical supplies after Netherlands changes Taiwan rep office name– China calls name change of office ‘provocative,’ threatens consumer boycott of Dutch goods...”- underscores how the virus has become a tool of global trade and influence warfare.
Not like we’re the only ones seeing it: Fitch has downgraded Taiwan from Stable to Negative in their financial ratings.
On the Way Down
Dow futures were down 450 when I looked earlier. And in our line-up with the 1929 decline, here’s where we’re set to open: (green circle)
Fed’s having a bitch of a time trying to keep the tide from running. But with 30-miillion newly minted unemployed in America, kinda hard to “talk the tide back” – and next week we get new unemployment figures. Life gets interesting, as if it wasn’t already.
Check of the grope dope: Biden 2020 campaign rocked by Tara Reade sexual assault allegation.
At least someone’s cleaning up these days: Clorox sales jump 15% on strong demand for cleaning products, raises forecast.
Air travel is still crashing: “Ryanair to cut 3,000 jobs, as lockdown pain spreads across Europe’s airlines.”
And put this in Ure pipe and smoke it: How 4/20 played out for marijuana companies across the US.
Off to another fun-filled day of adventure – more for Peoplenomics subscribers tomorrow…more here Sunday.
Write when you get rich,