Finally, we had less than 600,000 people file for first-time unemployment last week. I was wondering when we would run out of new claims since they have been persistently high for well over a year now. How high? How about 3 times the average prior to last March’s meltdown. Hopefully, we can now get back to work.
More good news! Spending was way up in March. Not a real shocker as the stimulus checks went out and it appears were spent in short order. I do have to ask what will lead to a redux in April since no more checks are expected.
While the spending is welcome news there is a worrisome trend taking place in manufacturing. While manufacturing was reported to have risen 1.4% it was below estimates of 2.5%.
To me, this is a real problem for inflation going forward. People buying things but replacement inventory not being produced- at least not in enough quantity. Add in the supply chain disruptions and we have a real recipe for too much cash chasing too few goods- a classic scenario for an inflationary environment.
I think it is imperative that anyone hearing about unprecedented rebounds in sales and manufacturing know the context in which these numbers are being presented. The Street is abuzz that with the comparison to last years numbers, this years numbers will be massively impressive. In all likelihood they WILL look great against a closed-down and locked-down economy from 2020. This still does not mean that we are anywhere near back to normal-whatever that may be these days.
It appears to me that the hype surrounding the rebound in the economy may be more hype than reality and buying stocks based upon an economic rebound theme may be disappointing.
In the meantime, it appears that the metals markets have started to move higher again as the global money spigots remain WIDE open and central banks are buying up just about everything.
While many may bring up inflation as our most pressing problem- and it most likely is going forward- and that should be positive for gold and silver, it appears that the rally this week is from falling yields. I remember back in the 1980s when rates were as high as 18% for a money market and 12% for a 5 year CD. During that time gold went from $35.00 in 1971 to near $800.00 in 1980. Obviously, since inflation was actually higher than the interest rates, we still had negative real interest rates. It really doesn’t matter WHAT the rate is- but whether whatever product you are talking about can produce a real inflation adjusted return over time.
This is important to understand because the traders are the ones looking at rates and moving prices around- as usual. What is apparent to me is that the “traders” are using official manipulated figures to make their trades. I am positive that my cost of living (and likely most everyone else’s also) is rising FAR faster than the “official” numbers which leads me to believe that inflation is being grossly underreported and interest rates are being held artificially low. It also appears to me that any meaningful rise in interest rates could collapse the entire system by bankrupting people, companies, corporations, cities, states and even nations. I am expecting LOW rates for as long as those in charge can keep them that way. In other words, until tis entire fake edifice collapses expect more of the same in exponentially increasing quantities as I have been explaining for the past 10 years. It is so obvious now it can’t be hidden anymore. I should clarify that a bit- I believe that we are extremely concerned by the debts, deficits and cash conjuring going on and we likely only know a small portion of what is actually taking place in the dark pools that the major banks trade in, where $140 trillion disappeared to according to Dr. Mark Skidmore of Michigan State University and the in-your face manipulation of almost all markets for the benefit of the few.
In other words, as I have said many times, when all of the fakery is revealed prices are going to revert to the mean and then some. Artificially propped up prices will collapse and artificially repressed prices will fly. When? That’s beyond my level of expertise but since we have 5000 years of history to look at and hundreds of instances where human beings have “printed” money and thought they were getting “something for nothing” there is NOT ONE instance of printing up “money” creating any lasting wealth. As a matter of fact, in each case the currency in question has ALWAYS collapsed from too much being produced.
Since the entire world is now in on the same scheme it is taking longer to play out- but play out it will.
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