investmentwatchblog--2020-10-27--China Sets Its Sights On Global EV Dominance

The world ’ s largest automotive market , China , is looking to become a dominant player in the rising global electric vehicle market .
Chinese EV manufacturers are expected to start expanding overseas , while Beijing already controls a large part of the global EV supply chain , beginning with critical minerals processing .
The United States has started to realize that China could dominate the future of transportation—electric transportation—if it does not counter the current Chinese influence over critical parts of the EV supply chain , from battery metals sourcing and processing to battery manufacturing .
China is @ @ @ @ @ @ @ , and the government is looking to have new energy vehicle ( NEV ) sales at up to 25 percent of all sales by 2025 , although it is not looking to ban sales of new gasoline-powered vehicles anytime soon .
Having supported EV manufacturers and sales over the past few years , Beijing now looks to expand its presence outside China .
“ Over the next five years we anticipate Chinese players across the EV supply chain to aggressively enter the overseas market , ” UBS said in a note last week @ @ @ @ @ @ @ We believe China materials costs are lower than the overseas market .
If this advantage can sustain , China could realize a cost advantage over ex-China players , ” according to UBS analysts .
Chinese EV brands are set to challenge Tesla and the western automakers outside China , while Beijing ’ s dominance in the supply chain is of great concern for U.S. energy security policy experts , as well as to the White House .
U.S. President Donald Trump declared last month a national emergency to deal with the threat that @ @ @ @ @ @ @ , especially on China , poses to national security and the U.S. economy .
“ Our dependence on one country , the People ’ s Republic of China ( China ) , for multiple critical minerals is particularly concerning .
The United States now imports 80 percent of its rare earth elements directly from China , with portions of the remainder indirectly sourced from China through other countries , ” President Trump ’ s executive order said .
China controls a large part of the EV supply chain , analysts say .
It @ @ @ @ @ @ @ most of the natural resources—in fact , 23 percent of global supply of all battery raw materials comes from China , according to Benchmark Mineral Intelligence .
However , China dominates chemical production of battery-grade raw materials with a whopping 80 percent of total global production .
China will host a total of 101 lithium-ion battery plants currently planned or under construction to 2029 out of all 136 plants planned globally by that date , Benchmark Mineral Intelligence said .
China controls 80 percent of the world ’ s raw material refining in @ @ @ @ @ @ @ percent of the world ’ s cell capacity , and 60 percent of the world ’ s component manufacturing , BNEF said in a report last month .
“ The next decade will be particularly interesting as Europe and the U.S. try to create their own battery champions to challenge Asian incumbents who are already building capacity in both places .
While Europe is launching initiatives to capture more of the raw material value chain , the U.S. is slower to react on this , ” said James Frith , BNEF ’ s @ @ @ @ @ @ @ s push to adopt EVs and support its electric car manufacturing and supply chain industries is not only the result of clean air policies .
“ By committing to adopt EVs that reduce its dependence on oil , Beijing would make itself less vulnerable if tensions between the United States and China were to increase .
In addition , EVs create opportunities for Chinese companies to benefit from a growing EV industry , and gain global recognition and credibility by developing sophisticated technology at a low cost , ” U.S. advocacy group Securing @ @ @ @ @ @ @ ) said in a report in September .
The U.S. and its partners need to develop a supply chain of critical minerals less dependent on China to counter Beijing ’ s dominance , General James Conway and Peter Ackerman , members of SAFE ’ s Energy Security Leadership Council , wrote in an op-ed in the Financial Times last week .
“ We risk a scenario in which we swap our dependence on a chaotic oil market dominated by Opec countries that do not share our strategic goals , for a reliance on @ @ @ @ @ @ @ ” the authors wrote .

By Tsvetana Paraskova
The world’s largest automotive market, China, is looking to become a dominant player in the rising global electric vehicle market. Chinese EV manufacturers are expected to start expanding overseas, while Beijing already controls a large part of the global EV supply chain, beginning with critical minerals processing.
The United States has started to realize that China could dominate the future of transportation—electric transportation—if it does not counter the current Chinese influence over critical parts of the EV supply chain, from battery metals sourcing and processing to battery manufacturing.
China is the world’s top EV market, and the government is looking to have new energy vehicle (NEV) sales at up to 25 percent of all sales by 2025, although it is not looking to ban sales of new gasoline-powered vehicles anytime soon.
Having supported EV manufacturers and sales over the past few years, Beijing now looks to expand its presence outside China.
“Over the next five years we anticipate Chinese players across the EV supply chain to aggressively enter the overseas market,” UBS said in a note last week, as carried by CNBC. “We believe China materials costs are lower than the overseas market. If this advantage can sustain, China could realize a cost advantage over ex-China players,” according to UBS analysts.
Chinese EV brands are set to challenge Tesla and the western automakers outside China, while Beijing’s dominance in the supply chain is of great concern for U.S. energy security policy experts, as well as to the White House.
U.S. President Donald Trump declared last month a national emergency to deal with the threat that America’s dependence on critical minerals, especially on China, poses to national security and the U.S. economy.
“Our dependence on one country, the People’s Republic of China (China), for multiple critical minerals is particularly concerning. The United States now imports 80 percent of its rare earth elements directly from China, with portions of the remainder indirectly sourced from China through other countries,” President Trump’s executive order said.
We are primarily funded by readers. Please subscribe and donate to support us!
China controls a large part of the EV supply chain, analysts say. It is a common misconception that China holds most of the natural resources—in fact, 23 percent of global supply of all battery raw materials comes from China, according to Benchmark Mineral Intelligence. However, China dominates chemical production of battery-grade raw materials with a whopping 80 percent of total global production. China will host a total of 101 lithium-ion battery plants currently planned or under construction to 2029 out of all 136 plants planned globally by that date, Benchmark Mineral Intelligence said.
China controls 80 percent of the world’s raw material refining in the lithium-ion battery supply chain, 77 percent of the world’s cell capacity, and 60 percent of the world’s component manufacturing, BNEF said in a report last month.
“The next decade will be particularly interesting as Europe and the U.S. try to create their own battery champions to challenge Asian incumbents who are already building capacity in both places. While Europe is launching initiatives to capture more of the raw material value chain, the U.S. is slower to react on this,” said James Frith, BNEF’s head of energy storage.
China’s push to adopt EVs and support its electric car manufacturing and supply chain industries is not only the result of clean air policies.
“By committing to adopt EVs that reduce its dependence on oil, Beijing would make itself less vulnerable if tensions between the United States and China were to increase. In addition, EVs create opportunities for Chinese companies to benefit from a growing EV industry, and gain global recognition and credibility by developing sophisticated technology at a low cost,” U.S. advocacy group Securing America’s Future Energy (SAFE) said in a report in September.
The U.S. and its partners need to develop a supply chain of critical minerals less dependent on China to counter Beijing’s dominance, General James Conway and Peter Ackerman, members of SAFE’s Energy Security Leadership Council, wrote in an op-ed in the Financial Times last week.
“We risk a scenario in which we swap our dependence on a chaotic oil market dominated by Opec countries that do not share our strategic goals, for a reliance on China for our future transportation needs,” the authors wrote.
By Tsvetana Paraskova for Oilprice.com


investmentwatchblog--2020-10-27--If Gold is Going to Explode Higher, It Should Happen in the NExt 48 Hours

If gold is going to explode higher , the move should start today or tomorrow .
As I ’ ve noted preciously , during inflation-driven bull markets in gold , gold miners typically outperform the precious metal .
For this reason I like to track the gold miners to gold ratio ( GDX : $ GOLD ) .
When gold miners outperform gold , this ratio rises .
When gold miners underperform gold this ratio falls .
As you can see in the chart below , this ratio has fallen to test MAJOR support ( green line ) .
It @ @ @ @ @ @ @ breaking its recent down trend ( blue lines ) .
This would mean a period in which gold miners DRAMATICALLY outperform gold .
Another key feature of bull markets in precious metals is that silver outperforms gold .
With that in mind , I also like to track the silver to gold ratio ( $ SILVER : $ GOLD ) .
When silver outperform gold , this ratio rises .
When silver underperform gold this ratio falls .
Right now , this ratio has fallen to test key support ( green line ) @ @ @ @ @ @ @ that finally breaks this triangle formation ( blue lines ) to the upside .
On that note , we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead .
The report is titled Survive the Inflationary Storm .
And it explains in very simply terms how to make inflation PAY YOU .
We are making just 100 copies available to the public .
As I write this there are just 9 left .
@ @ @ @ @ @ @ :

If gold is going to explode higher, the move should start today or tomorrow.
As I’ve noted preciously, during inflation-driven bull markets in gold, gold miners typically outperform the precious metal. For this reason I like to track the gold miners to gold ratio (GDX: $GOLD).
When gold miners outperform gold, this ratio rises. When gold miners underperform gold this ratio falls.
As you can see in the chart below, this ratio has fallen to test MAJOR support (green line). It should bounce here, which would mean breaking its recent down trend (blue lines). This would mean a period in which gold miners DRAMATICALLY outperform gold.
Another key feature of bull markets in precious metals is that silver outperforms gold. With that in mind, I also like to track the silver to gold ratio ($SILVER: $GOLD).
When silver outperform gold, this ratio rises. When silver underperform gold this ratio falls.
Right now, this ratio has fallen to test key support (green line). We should see a bounce here that finally breaks this triangle formation (blue lines) to the upside.
On that note, we just published a Special Investment Report concerning FIVE secret investments you can use to make inflation pay you as it rips through the financial system in the months ahead.
The report is titled Survive the Inflationary Storm. And it explains in very simply terms how to make inflation PAY YOU.
We are primarily funded by readers. Please subscribe and donate to support us!
We are making just 100 copies available to the public.
As I write this there are just 9 left.
To pick up yours, swing by:
www.phoenixcapitalmarketing.com/inflationstorm.html
Best Regards
Graham Summers
Chief Market Strategist
Phoenix Capital Research


investmentwatchblog--2020-10-27--A New World Monetary Order Is Coming

A New World Monetary Order Is Coming

The global coronavirus pandemic has accelerated several troubling trends already in force .
Among them are exponential debt growth , rising dependency on government , and scaled-up central bank interventions into markets and the economy .
Central bankers now appear poised to embark on their biggest power play ever .
Federal Reserve Chairman Jerome Powell , in coordination with the European Central Bank and International Monetary Fund ( IMF ) , is preparing to roll out central bank digital currencies .
The globalist IMF recently called for a new “ Bretton Woods Moment ” to address the loss of trillions @ @ @ @ @ @ @ to the coronavirus .
In the aftermath of World War II , the original Bretton Woods agreement established a world monetary order with the U.S. dollar as the reserve currency .
Importantly , the dollar was to be pegged to the price of gold .
Foreign governments and central banks could also redeem their dollar reserves in gold , and they started doing so in earnest in the 1960s and early 1970s .
In 1971 , President Richard Nixon closed the gold window , effectively ushering in a new world monetary order based @ @ @ @ @ @ @ of the United States .
An inflation crisis followed a few years later .
In response , the Federal Reserve took the painful step of jacking up interest rates to defend its wilting Federal Reserve Note and tame rising prices .
Fast forward to 2020 , and the Fed has assumed for itself novel policy mandates that are a precursor to a new monetary system .
But the monetary masters aren ’ t contemplating a return to sound money .
Rather , they ’ re planning for even more debt , more inflation @ @ @ @ @ @ @ in the economy .
The Fed has unceremoniously thrown its statutory dual mandate of full employment and stable prices out the window .
It now gives itself an unlimited mandate to inject stimulus and bailout cash wherever it sees fit ( including , recently , “ junk ” bond exchange-traded funds ) .
Instead of pursuing stable prices , the Fed is now explicitly embarking on an inflation-raising campaign with the goal of generating annual price level increases above 2 % for an undefined period .
The next frontier of the Fed ’ @ @ @ @ @ @ @ ” – a central bank digital currency .
Earlier this month Chairman Powell participated in an IMF panel on international payments and digital currencies .
He touted electronic payments systems and raised the possibility of integrating them into a central bank digital currency regime .
Powell has so far declined to outright endorse a move toward a fully cashless system which countries including China and Sweden are spearheading .
But he is on board with the larger globalist agenda of expanding the role of monetary policy in shaping economic and social outcomes .
@ @ @ @ @ @ @ monetary tools being aimed at every issue under the sun : “ We will have a chance to address some persistent problems – low productivity , slow growth , high inequalities , a looming climate crisis… We can do better than build back the pre-pandemic world – we can build forward to a world that is more resilient , sustainable , and inclusive.
” The IMF is being pressured by debt campaigners to sell some of its gold reserves to cover payments owed by some of the world ’ s poorest countries .
@ @ @ @ @ @ @ as Special Drawing Rights ( SDRs ) to cancel the debts of poor countries .
In a world where central bank balance sheets have grown by more than $ 7 trillion , it ’ s not surprising that everyone wants a piece of the pie and that many now view gold as dispensable .
Is gold merely a barbarous relic in this brave new digital world ?
If it were , then it would have collapsed in price this year , amid all the new central bank rollouts , instead of surging to @ @ @ @ @ @ @ be the ultimate hedge against the new world monetary order .
In the event that the U.S. central bank launches a digital dollar and assigns every American a virtual wallet , there would be no escaping adverse monetary policy decrees except by exiting fiat currencies entirely .
Under a central bank digital currency , authorities could impose negative interest rates on all holdings of currency units .
They could do so without needing to get anyone to buy negative-yielding bonds or deposit money into negative-yielding bank accounts .
Under a central bank digital @ @ @ @ @ @ @ replace stimulus checks and taxes .
It would be the vehicle through which modern monetary theory could be fully implemented – with the central bank becoming tax collector and funder of all government operations .
If depreciating the value of the currency through the inflation tax wasn ’ t enough , the Fed could also stick dollar-holders with a direct tax in the form of negative interest rates .
Once paper notes are phased out , holding cash itself would no longer be a way for individuals to escape negative rates .
The @ @ @ @ @ @ @ digital currencies ( such as Bitcoin ) or hard money ( gold and silver ) .
Under a monetary order where electronic digits representing currency can be created out of thin air in unlimited quantities , the best hedge is the opposite – tangible , scarce , untraceable wealth held off the financial grid .

by: Stefan Gleason
The global coronavirus pandemic has accelerated several troubling trends already in force. Among them are exponential debt growth, rising dependency on government, and scaled-up central bank interventions into markets and the economy.
Central bankers now appear poised to embark on their biggest power play ever.
Federal Reserve Chairman Jerome Powell, in coordination with the European Central Bank and International Monetary Fund (IMF), is preparing to roll out central bank digital currencies.
The globalist IMF recently called for a new “Bretton Woods Moment” to address the loss of trillions of dollars in global economic output due to the coronavirus.
In the aftermath of World War II, the original Bretton Woods agreement established a world monetary order with the U.S. dollar as the reserve currency.
Importantly, the dollar was to be pegged to the price of gold. Foreign governments and central banks could also redeem their dollar reserves in gold, and they started doing so in earnest in the 1960s and early 1970s.
In 1971, President Richard Nixon closed the gold window, effectively ushering in a new world monetary order based solely on the full faith and credit of the United States. An inflation crisis followed a few years later.
In response, the Federal Reserve took the painful step of jacking up interest rates to defend its wilting Federal Reserve Note and tame rising prices.
Fast forward to 2020, and the Fed has assumed for itself novel policy mandates that are a precursor to a new monetary system.
But the monetary masters aren’t contemplating a return to sound money. Rather, they’re planning for even more debt, more inflation, and picking of winners and losers in the economy.
The Fed has unceremoniously thrown its statutory dual mandate of full employment and stable prices out the window. It now gives itself an unlimited mandate to inject stimulus and bailout cash wherever it sees fit (including, recently, “junk” bond exchange-traded funds).
Instead of pursuing stable prices, the Fed is now explicitly embarking on an inflation-raising campaign with the goal of generating annual price level increases above 2% for an undefined period.
The next frontier of the Fed’s unlimited mandate could be “Fedcoin” – a central bank digital currency.
We are primarily funded by readers. Please subscribe and donate to support us!
Earlier this month Chairman Powell participated in an IMF panel on international payments and digital currencies. He touted electronic payments systems and raised the possibility of integrating them into a central bank digital currency regime.
Powell has so far declined to outright endorse a move toward a fully cashless system which countries including China and Sweden are spearheading. But he is on board with the larger globalist agenda of expanding the role of monetary policy in shaping economic and social outcomes.
IMF Managing Director Kristalina Georgieva sees expanded monetary tools being aimed at every issue under the sun: “We will have a chance to address some persistent problems – low productivity, slow growth, high inequalities, a looming climate crisis… We can do better than build back the pre-pandemic world – we can build forward to a world that is more resilient, sustainable, and inclusive.”
The IMF is being pressured by debt campaigners to sell some of its gold reserves to cover payments owed by some of the world’s poorest countries. The IMF would issue pseudo-currency units known as Special Drawing Rights (SDRs) to cancel the debts of poor countries.
In a world where central bank balance sheets have grown by more than $7 trillion, it’s not surprising that everyone wants a piece of the pie and that many now view gold as dispensable.
Is gold merely a barbarous relic in this brave new digital world? If it were, then it would have collapsed in price this year, amid all the new central bank rollouts, instead of surging to an all-time high.
Precious metals may be the ultimate hedge against the new world monetary order.
In the event that the U.S. central bank launches a digital dollar and assigns every American a virtual wallet, there would be no escaping adverse monetary policy decrees except by exiting fiat currencies entirely.
Under a central bank digital currency, authorities could impose negative interest rates on all holdings of currency units. They could do so without needing to get anyone to buy negative-yielding bonds or deposit money into negative-yielding bank accounts.
Under a central bank digital currency, direct credits and debits could replace stimulus checks and taxes. It would be the vehicle through which modern monetary theory could be fully implemented – with the central bank becoming tax collector and funder of all government operations.
If depreciating the value of the currency through the inflation tax wasn’t enough, the Fed could also stick dollar-holders with a direct tax in the form of negative interest rates. Once paper notes are phased out, holding cash itself would no longer be a way for individuals to escape negative rates.
The only escape hatches would be volatile alternative digital currencies (such as Bitcoin) or hard money (gold and silver).
Under a monetary order where electronic digits representing currency can be created out of thin air in unlimited quantities, the best hedge is the opposite – tangible, scarce, untraceable wealth held off the financial grid.


investmentwatchblog--2020-10-27--‘Fireball’ that fell to Earth is full of pristine extraterrestrial organic compounds, scientists say

A fireball that fell to Earth in 2018 contains “ pristine extraterrestrial organic compounds ” that could help tell us @ @ @ @ @ say .
The meteor arrived on Earth in January 2018 , as a streaking fireball @ @ @ @ @ the US Midwest .
Scientists were able to track it using weather radar , and @ @ @ @ @ from the ground before its chemical makeup was changed by exposure to liquid water .
@ @ @ @ @ they recovered offers them the ability to explore such rocks as they might appear when @ @ @ @ @ , but using the equipment they have down on Earth .
They describe their early @ @ @ @ @ published in the journal Meteoritics & Planetary Science .

A fireball that fell to Earth in 2018 contains “pristine extraterrestrial organic compounds” that could help tell us how life formed, scientists say.
The meteor arrived on Earth in January 2018, as a streaking fireball visible across the sky of the US Midwest. Scientists were able to track it using weather radar, and hunters picked the meteorite up from the ground before its chemical makeup was changed by exposure to liquid water.
Now researchers say the material they recovered offers them the ability to explore such rocks as they might appear when they are still in space, but using the equipment they have down on Earth.
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They describe their early findings in a new paper published in the journal Meteoritics & Planetary Science.
www.independent.co.uk/life-style/gadgets-and-tech/nasa-meteor-meteorite-fireball-earth-space-b1372924.html


investmentwatchblog--2020-10-27--“Unless the US stops printing money, the dollar will collapse.”

We ’ re less than two weeks away from the US election , and yet this sense of utter confusion , bitter political conflict , and economic uncertainty that has been ominously hovering over the nation , as well as the rest of the world , doesn ’ t seem to have subsided .
The country still appears to be in a directionless state , with its economy in serious trouble and its society dangerously fragmented .
There seems to be a wide rift in US politics , which is not just pragmatic or ideological , but perceptual too : @ @ @ @ @ @ @ supporters appear to be living in and arguing about two different versions of reality , and neither corresponds to the actual experiences of most ordinary citizens , taxpayers and savers .
This disconcerting dissonance became painfully apparent in the first Presidential debate , at least to those who had the patience to keep watching after the first few minutes .
It was especially pronounced when the candidates were asked about their economic policies and recovery plans .
Both had all these grand plans , big-spending dreams and voter-pleasing promises , and for those @ @ @ @ @ @ @ basic lessons from our monetary history , one thing was clear as day : If there ’ s one thing the two sides can agree on , it ’ s that fiscal prudence , responsibility and long-term thinking , are at the bottom of their priority list .
This has serious implications for investors and savers that go well beyond the theoretical realm of politics and ideology .
To put all these risks in their proper context and to help us get a clearer understanding of how investors can prepare for what lies @ @ @ @ @ @ @ Barron for some of his valuable insights .
Pat is an Austrian school economist and he has been a private consultant to the banking industry since 1985 .
He has taught an introductory course in Austrian economics for several years at the University of Iowa and he also taught for over thirty years at the Graduate School of Banking at the University of Wisconsin .
He has written dozens of excellent essays disseminated worldwide , including the Mises Institute , Auburn , Alabama , USA .
Claudio Grass ( CG ) : For @ @ @ @ @ @ @ past decade was a fascinating period .
Many of us expected this reckless experiment with QE , negative rates and aggressive expansionism by central bankers to end in tears , but few could have foreseen the response to the Covid crisis .
Do you expect this move to “ double down ” on bad policies to expedite the monetary system ’ s demise or perhaps to breathe new life into it and simply prolong it ?
Patrick Barron ( PB ) : An old grad school professor of mine always reminded us that @ @ @ @ @ @ @ give an analogy just the same .
Printing money is analogous to taking some stimulant such as cocaine .
Taking cocaine and printing money out of thin air don ’ t really improve one ’ s health or the economy , and the user and the economy may improve due to other factors .
But over time , one needs to take bigger and bigger doses in order to achieve the same effect .
If the drug user continues , at some point the drug will kill him .
How much cocaine is @ @ @ @ @ @ @ Undoubtedly the dosage differs with the individual–the stronger being able to take larger doses over a longer period of time than the weaker .
The US is stronger than Zimbabwe , for example .
This means that the US can print more money over a longer period of time .
But it does not mean that the US can print money forever and in ever increasing quantities and always experience the same artificial high .
No one really knows when the dollar will collapse .
But , we do know that unless the @ @ @ @ @ @ @ WILL collapse .
The response to the Covid crisis has undoubtedly hastened that day .
CG : As though the massive monetary support wasn ’ t enough of a problem , this time we ’ re also seeing unprecedented injections from the fiscal side too .
Debt levels are through the roof in most major economies and spending is not expected to be rolled back any time soon , but everybody seems to have accepted the core tenet of Modern Monetary Theory , that “ deficits don ’ t matter ” .
Has @ @ @ @ @ @ @ , even if we ’ re not calling it that ?
PB : Yes .
All the central bankers of the world are card carrying Keynesians .
A tenet of Keynesianism is that money and capital are the same thing .
Saving isn ’ t necessary , because the state can always print money , which Keynesians claim to be the same thing .
The so-called Modern Monetary Theory is nothing more than an attempt to make the old Keynesian aggregate demand theory something new and exciting .
It ’ s not new @ @ @ @ @ @ @ course deficits matter .
Unfortunately , the entire West can not repay its debts with money of the same purchasing power as borrowed .
Currently , the worst sufferers of MMT are retirees .
Their lifetime of frugality is for naught as the purchasing power of their savings drops and they can not live on the low interest income that their savings generates .
CG : A lot has been said and written over the last years about the Universal Basic Income .
The Swiss already rejected it when it was put to @ @ @ @ @ @ @ nations have embraced UBI experiments , including the latest one in Germany that was launched only a couple of months back .
Do you see a version of this as a realistic policy scenario amid the Covid crisis ?
Could we see US-style “ Covid checks ” become the norm ?
PB : It does seem that there is no entitlement that can not be demanded .
A universal basic income may be in our future .
But readers should understand that there is no such thing as a free lunch .
The @ @ @ @ @ @ @ don ’ t necessarily mean the Fed ’ s printing press or computer terminal .
I mean that real people labor to produce goods and services that are claimed by others who offer nothing in return .
Professor Frank Shostak calls that “ something for nothing ” , and it destroys wealth .
The so-called Covid stimulus checks are just another consequence of the government ’ s ability to print fiat money .
In an economy with sound money , meaning a gold/silver standard , the people know that government must get the @ @ @ @ @ @ @ productive sector ’ s pockets .
Either taxes increase , some other popular program is cut , or the government issues more debt , which will cause interest rates to increase and may even cause a recession .
But the people are used to simply demanding both government expansion AND tax cuts !
Doing so is like squeezing a balloon .
The balloon does not get smaller ; it just pops out somewhere else .
In the case of fiat money expansion with artificially suppressed interest rates , we can expect higher prices @ @ @ @ @ @ @ are getting , despite government propaganda that claims otherwise .
In the upcoming second part of the interview , Patrick highlights the risks in the banking sector , while we also examine the implications of the election and the extreme political divisions and social unrest in the US .
This article has been published in the Newsroom of pro aurum , the leading precious metals company in Europe with an independent subsidiary in Switzerland .
This work is licensed under a Creative Commons Attribution 4.0 International License .
Picture Source : Patrick Barron

by Claudio Grass
Interview with Patrick Barron – Part I of II
We’re less than two weeks away from the US election, and yet this sense of utter confusion, bitter political conflict, and economic uncertainty that has been ominously hovering over the nation, as well as the rest of the world, doesn’t seem to have subsided. The country still appears to be in a directionless state, with its economy in serious trouble and its society dangerously fragmented.
There seems to be a wide rift in US politics, which is not just pragmatic or ideological, but perceptual too: The two “camps” and their supporters appear to be living in and arguing about two different versions of reality, and neither corresponds to the actual experiences of most ordinary citizens, taxpayers and savers. This disconcerting dissonance became painfully apparent in the first Presidential debate, at least to those who had the patience to keep watching after the first few minutes. It was especially pronounced when the candidates were asked about their economic policies and recovery plans. Both had all these grand plans, big-spending dreams and voter-pleasing promises, and for those of us who understand even the very basic lessons from our monetary history, one thing was clear as day: If there’s one thing the two sides can agree on, it’s that fiscal prudence, responsibility and long-term thinking, are at the bottom of their priority list.
This has serious implications for investors and savers that go well beyond the theoretical realm of politics and ideology. To put all these risks in their proper context and to help us get a clearer understanding of how investors can prepare for what lies ahead, I asked my friend Patrick Barron for some of his valuable insights. Pat is an Austrian school economist and he has been a private consultant to the banking industry since 1985. He has taught an introductory course in Austrian economics for several years at the University of Iowa and he also taught for over thirty years at the Graduate School of Banking at the University of Wisconsin. He has written dozens of excellent essays disseminated worldwide, including the Mises Institute, Auburn, Alabama, USA.
Claudio Grass (CG): For any student of monetary history, the past decade was a fascinating period. Many of us expected this reckless experiment with QE, negative rates and aggressive expansionism by central bankers to end in tears, but few could have foreseen the response to the Covid crisis. Do you expect this move to “double down” on bad policies to expedite the monetary system’s demise or perhaps to breathe new life into it and simply prolong it?
Patrick Barron (PB): An old grad school professor of mine always reminded us that all analogies distort, yet I will give an analogy just the same. Printing money is analogous to taking some stimulant such as cocaine. Taking cocaine and printing money out of thin air don’t really improve one’s health or the economy, and the user and the economy may improve due to other factors. But over time, one needs to take bigger and bigger doses in order to achieve the same effect. If the drug user continues, at some point the drug will kill him. How much cocaine is too much? No one knows.
Undoubtedly the dosage differs with the individual–the stronger being able to take larger doses over a longer period of time than the weaker. The US is stronger than Zimbabwe, for example. This means that the US can print more money over a longer period of time. But it does not mean that the US can print money forever and in ever increasing quantities and always experience the same artificial high. No one really knows when the dollar will collapse. But, we do know that unless the US stops printing money, the dollar WILL collapse. The response to the Covid crisis has undoubtedly hastened that day.
CG: As though the massive monetary support wasn’t enough of a problem, this time we’re also seeing unprecedented injections from the fiscal side too. Debt levels are through the roof in most major economies and spending is not expected to be rolled back any time soon, but everybody seems to have accepted the core tenet of Modern Monetary Theory, that “deficits don’t matter”. Has the West officially adopted MMT in practice, even if we’re not calling it that?
We are primarily funded by readers. Please subscribe and donate to support us!
PB: Yes. All the central bankers of the world are card carrying Keynesians. A tenet of Keynesianism is that money and capital are the same thing. Saving isn’t necessary, because the state can always print money, which Keynesians claim to be the same thing. The so-called Modern Monetary Theory is nothing more than an attempt to make the old Keynesian aggregate demand theory something new and exciting. It’s not new and it’s dangerous. Of course deficits matter. Unfortunately, the entire West cannot repay its debts with money of the same purchasing power as borrowed. Currently, the worst sufferers of MMT are retirees. Their lifetime of frugality is for naught as the purchasing power of their savings drops and they cannot live on the low interest income that their savings generates.
CG: A lot has been said and written over the last years about the Universal Basic Income. The Swiss already rejected it when it was put to a referendum years ago, but other nations have embraced UBI experiments, including the latest one in Germany that was launched only a couple of months back. Do you see a version of this as a realistic policy scenario amid the Covid crisis? Could we see US-style “Covid checks” become the norm?
PB: It does seem that there is no entitlement that cannot be demanded. A universal basic income may be in our future. But readers should understand that there is no such thing as a free lunch. The UBI comes from somewhere, and I don’t necessarily mean the Fed’s printing press or computer terminal. I mean that real people labor to produce goods and services that are claimed by others who offer nothing in return. Professor Frank Shostak calls that “something for nothing”, and it destroys wealth. The so-called Covid stimulus checks are just another consequence of the government’s ability to print fiat money.
In an economy with sound money, meaning a gold/silver standard, the people know that government must get the money for these boondoggles out of the productive sector’s pockets. Either taxes increase, some other popular program is cut, or the government issues more debt, which will cause interest rates to increase and may even cause a recession. But the people are used to simply demanding both government expansion AND tax cuts! Doing so is like squeezing a balloon. The balloon does not get smaller; it just pops out somewhere else. In the case of fiat money expansion with artificially suppressed interest rates, we can expect higher prices. And this is exactly what we are getting, despite government propaganda that claims otherwise.
In the upcoming second part of the interview, Patrick highlights the risks in the banking sector, while we also examine the implications of the election and the extreme political divisions and social unrest in the US.
Claudio Grass, Hünenberg See, Switzerland
This article has been published in the Newsroom of pro aurum, the leading precious metals company in Europe with an independent subsidiary in Switzerland.
This work is licensed under a Creative Commons Attribution 4.0 International License.
Picture Source: Patrick Barron


investmentwatchblog--2020-10-27--There Is No Way Biden Is Ahead And No Way It’s A Tied Race

BYRON YORK : The big Trump rallies you don ’ t see .
“ I can ’ t believe there aren ’ t any newspeople here , ” said Linda of Greene County , Pennsylvania , as she stood among hundreds of cars and pickup trucks idling in long parallel lines in a vast big-box-store parking lot Saturday , waiting to join the Interstate 70 Trump Train .
Indeed , although there were carloads of Trump supporters as far as one could see , and many more on the way from Ohio and West Virginia , and this enormous political @ @ @ @ @ @ @ before the presidential election , as far as I could tell , I was the only newsperson there .
It was the biggest political rally no one saw .
And gatherings like it have been happening for months in some of the places President Trump needs most to win if he is to be reelected .
And , remarkably , the rallies are not the work of the Trump campaign .
The road rally in Washington , Pennsylvania , was organized and staged by local Trump supporters , linked together largely by Facebook @ @ @ @ @ @ @ for the president in western Pennsylvania and surrounding areas is not just strong but stronger than it was when Trump eked out a victory in Pennsylvania in 2016 .
If Trump wins this critical state , it will owe in significant part to this organic movement and the energetic organizers who have nothing to do with his campaign .

THIS IS A SPONTANEOUS TRUMP RALLY!
BYRON YORK: The big Trump rallies you don’t see.
“I can’t believe there aren’t any newspeople here,” said Linda of Greene County, Pennsylvania, as she stood among hundreds of cars and pickup trucks idling in long parallel lines in a vast big-box-store parking lot Saturday, waiting to join the Interstate 70 Trump Train. Indeed, although there were carloads of Trump supporters as far as one could see, and many more on the way from Ohio and West Virginia, and this enormous political event was happening less than two weeks before the presidential election, as far as I could tell, I was the only newsperson there.
It was the biggest political rally no one saw. And gatherings like it have been happening for months in some of the places President Trump needs most to win if he is to be reelected. And, remarkably, the rallies are not the work of the Trump campaign. The road rally in Washington, Pennsylvania, was organized and staged by local Trump supporters, linked together largely by Facebook, who want to show that enthusiasm for the president in western Pennsylvania and surrounding areas is not just strong but stronger than it was when Trump eked out a victory in Pennsylvania in 2016. If Trump wins this critical state, it will owe in significant part to this organic movement and the energetic organizers who have nothing to do with his campaign.


investmentwatchblog--2020-10-27--Who the hell would vote for this man to run the country? Pure insanity.

Who the hell would vote for this man to run the country ?
Pure insanity .
pic.twitter.com/mi7r6ZjRhN This is true @ @ @ @ @ he 'll lock down everything and the economy will die which is I think the @ @ @ @ @ who are behind the `` Great Reset '' scam t.co/1Qa6LLHPzd

Who the hell would vote for this man to run the country? Pure insanity. pic.twitter.com/mi7r6ZjRhN
This is true though. If Biden wins he'll lock down everything and the economy will die which is I think the ultimate Agenda of these people who are behind the "Great Reset" scam t.co/1Qa6LLHPzd
— Mr Foxnose (@asymmetricalpha) October 27, 2020


investmentwatchblog--2020-10-27--The new norm in a 0% interest rate world. Wait for the risk event to pass and we will begin to see o

The new norm in a 0 % interest rate world .
Wait for the risk event to pass and we @ @ @ @ @ from the Dollar into high yielding currencies like never before.
# USD # USDINR # @ @

The new norm in a 0% interest rate world.
Wait for the risk event to pass and we will begin to see outflows from the Dollar into high yielding currencies like never before.#USD #USDINR #USDOLLAR pic.twitter.com/VtnQALSTvo
— BeSomebodyFX (@BeSomebodyFX) October 27, 2020


investmentwatchblog--2020-10-27--So Florida is the first state in terms of search results for “how to change the vote” and apparently

So Florida is the first state in terms of search results for “how to change the vote” and apparently who voted already voted for Biden, I will leave that up to your interpretation.

We are 1 week away from elections , meanwhile , Google trends is exploding with `` how do I change @ @ @ @ @ and the market is positioned for a Biden win while history teaches us that Trump @ @ @ @ @ SP500 # ES_F # NASDAQ # RTY # RUT # SPX # VIX pic.twitter.com/B1dUKyyx1N So @ @ @ @ @ in terms of search results for `` how to change the vote '' and apparently @ @ @ @ @ Biden , I will leave that up to your interpretation.
# SP500 # ES_F # @ @ @ @ @ # SPX # VIX pic.twitter.com/b3YKGfBphF

We are 1 week away from elections, meanwhile, Google trends is exploding with "how do I change my vote" search results and the market is positioned for a Biden win while history teaches us that Trump can surprise polls. #SP500 #ES_F #NASDAQ #RTY #RUT #SPX #VIX pic.twitter.com/B1dUKyyx1N
So Florida is the first state in terms of search results for "how to change the vote" and apparently who voted already voted for Biden, I will leave that up to your interpretation.#SP500 #ES_F #NASDAQ #RTY #RUT #SPX #VIX pic.twitter.com/b3YKGfBphF
— BeSomebodyFX (@BeSomebodyFX) October 26, 2020


investmentwatchblog--2020-10-27--Dow Jones 26600 the most important number . Anything above is still in the safe zone BELOW and the b

Dow Jones 26600 the most important number .
Anything above is still in the safe zone BELOW and the bear @ @ @ @ @ sitting right on top of the June highs as support .
Large message : The @ @ @ @ @ in the last 4.5 months .
Lots of open gaps .
pic.twitter.com/9PM7dvTbVx

Dow Jones 26600 the most important number . Anything above is still in the safe zone BELOW and the bear market/crash begins pic.twitter.com/CDyA3z88xF
$NYSE sitting right on top of the June highs as support.
Large message: The broader market has gone nowhere in the last 4.5 months.
Lots of open gaps. pic.twitter.com/9PM7dvTbVx
— Sven Henrich (@NorthmanTrader) October 27, 2020


investmentwatchblog--2020-10-27--US banks always follow the European banks…

Agree .
This is a good explanation for why EU banks are on the precipice : t.co/BbKlXYjDOE And this is @ @ @ @ @ U.S. banks like GS , MS , JPM and C have derivatives counter-party exposure risk @ @ @ @ @

Agree. This is a good explanation for why EU banks are on the precipice: t.co/BbKlXYjDOE
And this is even better: t.co/d62SnwN5Rk
And U.S. banks like GS, MS, JPM and C have derivatives counter-party exposure risk to the big EU banks
— Dave Kranzler (@InvResDynamics) October 27, 2020


investmentwatchblog--2020-10-27--2020 Has Been A Hard Year For Higher Ed With 337,000 Jobs Lost. Could 2021 Be Worse?

Chronicle of Higher Education , 2020 Has Been a Hard Year for Higher Ed .
Could 2021 Be Worse ?
@ @ @ @ @ to calculate the full costs of the coronavirus , including the fallout from declining enrollments @ @ @ @ @ At places like Ithaca College , the impact of the pandemic is accelerating plans for @ @ @ @ @ and academic programs .
Beginning this spring , the college will begin to cut nearly @ @ @ @ @ faculty members , said La Jerne T. Cornish , Ithaca ’ s provost .
The @ @ @ @ @ is 4,785 full-time students , more than 900 students fewer than a year ago , @ @ @ @ @ 16 percent , according to the college ’ s figures .
At the same time @ @ @ @ @ budget shortfall of $ 8 million because of increased operating costs — an amount that @ @ @ @ @ of the academic year , Cornish said .

Chronicle of Higher Education, 2020 Has Been a Hard Year for Higher Ed. Could 2021 Be Worse?:
Colleges are now starting to calculate the full costs of the coronavirus, including the fallout from declining enrollments and rising operating costs.
At places like Ithaca College, the impact of the pandemic is accelerating plans for major cuts in faculty jobs and academic programs. Beginning this spring, the college will begin to cut nearly a quarter of its 547 faculty members, said La Jerne T. Cornish, Ithaca’s provost.


investmentwatchblog--2020-10-27--This is hilarious Epic TROLLING!

This is hilarious Epic TROLLING!

This is some epic trolling right here : pic.twitter.com/hD7HHZeCih

This is some epic trolling right here: pic.twitter.com/hD7HHZeCih
— John Cardillo (@johncardillo) October 27, 2020


investmentwatchblog--2020-10-27--All Bubbles Eventually Find A Pin

All Bubbles Eventually Find A Pin

Stock markets tumble on renewed fears .
Blue wave may not crest as once was expected .
More stimulus comes @ @ @ @ @ is the Republican Jimmy Carter .
Trump ’ s legacy will be his successful Supreme @ @ @ @ @ important thing this election is to prevent Democrats from taking control of the Senate .

by Peter Schiff of Peter Schiff Podcast
We are primarily funded by readers. Please subscribe and donate to support us!
Stock markets tumble on renewed fears.
Blue wave may not crest as once was expected.
More stimulus comes with bigger government.
Trump is the Republican Jimmy Carter.
Trump’s legacy will be his successful Supreme Court nominees.
The most important thing this election is to prevent Democrats from taking control of the Senate.


investmentwatchblog--2020-10-27--A NEW GOLD BULL MARKET! – CHAOS LEADS TO GOLD SKYROCKETING – IS THIS JUST THE BEGINNING?

Can we finally say we are in a bull market for precious metals ?

Quinton Hennigh with Josh Sigurdson via World Alternative Media
We are primarily funded by readers. Please subscribe and donate to support us!
Can we finally say we are in a bull market for precious metals?


investmentwatchblog--2020-10-27--MARKETS TURNING? LOOK FOR THESE SUPPORT LEVELS

by Chris Vermeulen of The Technical Traders The breakdown in the US stock markets early on Monday , October 26 , was more about investor expectations and a transitioning away from risk ahead of the US Elections than any other factor .
No new stimulus deal being reached in addition to a surge in US COVID-19 cases recently suggests another contraction in the US economy may not be too far away .
Additionally , as news bombs seem to be nearly an hourly event , investors and traders are suddenly much more uncertain of the outcome of the US elections @ @ @ @ @ @ @ There are three key factors putting downward pressure on equities today : • Risk off : Risk capital is being pulled away from high-flying sectors in an attempt to eliminate excessive drawdowns as a result of extreme volatility throughout the election event .
• COVID-19 Cases Surge : Heading into the early Fall season , COVID-19 cases in the US are starting to rise again .
This sets up the expectation that travel , consumer spending and all levels of consumer activity may take another hit just before the holiday season .
• @ @ @ @ @ @ @ , skilled traders are suddenly realizing their expectations may not be as “ solid ” as many thought 30 days ago .
This requires an immediate change in planning/structure .
These new environmental aspects related to the capital markets suggest that a “ repricing event ” is likely to continue before the November 3 election day .
The repricing event will likely attempt to test lower support levels in the markets – possibly attempting to reach recent Major Support levels .
My team and I outline the support levels on the 240 Minute @ @ @ @ @ @ @ Futures ( ES ) charts .
Read on to learn more .
The first chart below is the 240 minute ES chart .
It highlights three key support levels .
The Broken Support level is the most recent support level that was acting as a floor for price – until today .
Minor support exists just below that level between $ 3370~ $ 3400 .
Below that , we find Major support near $ 3325~ $ 3355 .
Our research team believes the current price breakdown , or repricing of risk , is @ @ @ @ @ @ @ fairly quickly .
Of course , we could find other support levels below these current levels , but we believe the current downside price trend is simply an impulse price trend related to the three components listed above .
We believe the Major support level will act as a strong price floor over the next 5+ days and potentially set up a substantial price bottom/base near the election day .
This Daily ES chart shows similar support levels , yet the Major Support level adjusted a bit lower – targeting levels near $ @ @ @ @ @ @ @ level on this Daily chart is aligned with the Minor support level on the 240 minute chart – which suggests this Minor support level may provide a reasonable price floor in the immediate future .
Otherwise , the deeper Major support level is likely to prompt a price bottom/base .
We believe traders and investors have already priced into the markets suitable expectations related to information available to them before these new COVID and other data points became available .
Now , as there is an immediacy related to adjusting positions and allocation @ @ @ @ @ @ @ traders are “ repricing ” perceived risks and that results in what we call an “ impulse price move ” .
Structurally , not much has changed from the past few weeks in terms of economic data/expectations .
Traders are simply pulling risk away from the markets in an attempt to prepare for unknowns ahead of the November elections .
This means that capital will be primed and ready to redeploy into the markets once the dust settles .
As far as we are concerned , it means more opportunities for great trends @ @ @ @ @ @ @ expect traders and investors to deploy their capital into suitable sectors/trends as soon as they are capable of discharging the risk concerns that are perceived right now .
That could come as early as November 5th or so if the election results are known by then .
I have been through a few bull/bear market cycles in stocks and commodities .
I have a good pulse on the market and timing key turning points for investing and short-term swing traders .
If you want to learn how to become a better trader and @ @ @ @ @ @ @ we can help you make money with our research and trading signals .
Don ’ t miss all the incredible trends and trade setups coming up !
NOTICE AND DISCLAIMER : Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research .
It is provided for educational purposes only and is not intended to be acted upon .
Please see your financial advisor before making any trading or investment decisions .
Read our FULL DISCLAIMER here .

by Chris Vermeulen of The Technical Traders
The breakdown in the US stock markets early on Monday, October 26, was more about investor expectations and a transitioning away from risk ahead of the US Elections than any other factor. No new stimulus deal being reached in addition to a surge in US COVID-19 cases recently suggests another contraction in the US economy may not be too far away. Additionally, as news bombs seem to be nearly an hourly event, investors and traders are suddenly much more uncertain of the outcome of the US elections which are nearly 7 days away.
KEY FACTORS DRIVING ANOTHER RETEST OF RECENT SUPPORT
There are three key factors putting downward pressure on equities today:
Risk off: Risk capital is being pulled away from high-flying sectors in an attempt to eliminate excessive drawdowns as a result of extreme volatility throughout the election event. COVID-19 Cases Surge: Heading into the early Fall season, COVID-19 cases in the US are starting to rise again. This sets up the expectation that travel, consumer spending and all levels of consumer activity may take another hit just before the holiday season. Changing Expectations: As the election nears, skilled traders are suddenly realizing their expectations may not be as “solid” as many thought 30 days ago. This requires an immediate change in planning/structure.
These new environmental aspects related to the capital markets suggest that a “repricing event” is likely to continue before the November 3 election day. The repricing event will likely attempt to test lower support levels in the markets – possibly attempting to reach recent Major Support levels. My team and I outline the support levels on the 240 Minute and Daily S&P 500 E-Mini Futures (ES) charts. Read on to learn more.
240-MINUTE ES SUPPORT LEVEL
The first chart below is the 240 minute ES chart. It highlights three key support levels. The Broken Support level is the most recent support level that was acting as a floor for price – until today. Minor support exists just below that level between $3370~$3400. Below that, we find Major support near $3325~$3355.
Our research team believes the current price breakdown, or repricing of risk, is an impulse price trend that will end fairly quickly. Of course, we could find other support levels below these current levels, but we believe the current downside price trend is simply an impulse price trend related to the three components listed above. We believe the Major support level will act as a strong price floor over the next 5+ days and potentially set up a substantial price bottom/base near the election day.
We are primarily funded by readers. Please subscribe and donate to support us!
DAILY ES SUPPORT LEVEL
This Daily ES chart shows similar support levels, yet the Major Support level adjusted a bit lower – targeting levels near $3200~$3270. The Minor support level on this Daily chart is aligned with the Minor support level on the 240 minute chart – which suggests this Minor support level may provide a reasonable price floor in the immediate future. Otherwise, the deeper Major support level is likely to prompt a price bottom/base.
We believe traders and investors have already priced into the markets suitable expectations related to information available to them before these new COVID and other data points became available. Now, as there is an immediacy related to adjusting positions and allocation level because of these new concerns, traders are “repricing” perceived risks and that results in what we call an “impulse price move”. Structurally, not much has changed from the past few weeks in terms of economic data/expectations. Traders are simply pulling risk away from the markets in an attempt to prepare for unknowns ahead of the November elections.
This means that capital will be primed and ready to redeploy into the markets once the dust settles. As far as we are concerned, it means more opportunities for great trends and triggers will setup shortly. We expect traders and investors to deploy their capital into suitable sectors/trends as soon as they are capable of discharging the risk concerns that are perceived right now. That could come as early as November 5th or so if the election results are known by then.
I have been through a few bull/bear market cycles in stocks and commodities. I have a good pulse on the market and timing key turning points for investing and short-term swing traders. If you want to learn how to become a better trader and investor, visit www.TheTechnicalTraders.com to learn how we can help you make money with our research and trading signals. Don’t miss all the incredible trends and trade setups coming up!
Chris Vermeulen
Chief Market Strategist
www.TheTechnicalTraders.com
NOTICE AND DISCLAIMER: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research. It is provided for educational purposes only and is not intended to be acted upon. Please see your financial advisor before making any trading or investment decisions. Read our FULL DISCLAIMER here.


investmentwatchblog--2020-10-27--ALERT! Stocks Falling as Our World Breaks FREE from Controllers!!

by Bix Weir of Road to Roota I am very hopeful for the future KNOWING that it ’ s mankind @ @ @ @ @ care of ourselves….but getting there will be VERY , VERY messy and it ’ s @ @ @ @ @ the sidelines and WATCH THE SHOW !

by Bix Weir of Road to Roota
We are primarily funded by readers. Please subscribe and donate to support us!
I am very hopeful for the future KNOWING that it’s mankind’s turn to take care of ourselves….but getting there will be VERY, VERY messy and it’s best to just sit on the sidelines and WATCH THE SHOW!


investmentwatchblog--2020-10-27--Where Is My Income Going To Come From?

Where Is My Income Going To Come From?

I never thought I ’ d write an article like this .
For income we typically rely on : You may have other sources – but for most of us , that ’ s it .
The current situation has made the job market far from certain .
If you feel you ’ ve got a job for life then well done .
But someone once said : “ He who remains calm whilst everyone around them is panicking – probably does not have a full grasp of the seriousness of the situation ” The situation is certainly serious .
@ @ @ @ @ @ @ the coming months and the virus impacting many sectors that you ’ d normally view as “ safe ” – getting a regular income from your job is less certain than it used to be .
With so many companies struggling and no vaccine in sight , the ability to get regular , dependable dividends is not what it used to be .
A few weeks ago , the Evening Standard in the UK ran an article that said 49 out of the FTSE 100 companies had either slashed or stopped paying their @ @ @ @ @ @ @ situation is similar across the World .
It would be no surprise to me if this number got worse .
Potentially , a lot worse .
When my parents retired you could get an annuity that paid enough for many to live off .
But those days are over .
Here is an annuity table I recently took a look at .
I would probably need a pension of at least £3m to have the kind of retirement I want .
My pension is nowhere near that .
Negative interest rates are becoming @ @ @ @ @ @ @ t want to rely on fixed income products .
Especially with global debt going through the roof .
Which brings me on to property .
The darling of many private investors .
I used to think this was pretty bullet proof from an income perspective .
Yes the value could move around , but if you had a property in the right area and targeted the right tenants…..you were fine .
Now I ’ m not so sure .
• with job security being so tenuous , are you going to be able @ @ @ @ @ @ @ Let ’ s say you can .
• People typically sign a 12 months lease , so if there ’ s a downturn it can take a while to hit the rental market .
Appreciate that leases are running out on a monthly basis , but the longer this goes on , the less willing tenants may be to sign on at the same price .
A friend of mine who has several residential properties has told me he ’ s had to cut the rent to get his tenants .
The competition @ @ @ @ @ @ @ competitive he ’ s had to follow suit .
Hopefully this is just a short-term phase .
But if it ’ s not , then property may no longer be the great income generator it used to be .
Which brings me on to Gold .
For many gold has been a pariah .
A non-starter from an investor perspective…..because it does not pay a dividend .
But with many gold mining companies not only maintaining but also increasing their dividend….that could be about to change .
People may start to view gold @ @ @ @ @ @ @ source of income – through investment in the gold miners .
If that happens , it could have a profound impact on the gold market .
Simon Popple writes The Brookville Capital Intelligence Report , a weekly report covering investments in commodities .
Please go to www.brookvillecapital.com to find out more .

by Simon Popple of Brookville Capital
I never thought I’d write an article like this.
For income we typically rely on:
Our job Dividends Interest Property
You may have other sources – but for most of us, that’s it.
The current situation has made the job market far from certain. If you feel you’ve got a job for life then well done. But someone once said:
“He who remains calm whilst everyone around them is panicking – probably does not have a full grasp of the seriousness of the situation”
The situation is certainly serious.
With unemployment forecast to rise dramatically over the coming months and the virus impacting many sectors that you’d normally view as “safe” – getting a regular income from your job is less certain than it used to be.
Moving down the list.
With so many companies struggling and no vaccine in sight, the ability to get regular, dependable dividends is not what it used to be. A few weeks ago, the Evening Standard in the UK ran an article that said 49 out of the FTSE 100 companies had either slashed or stopped paying their dividends. I’m sure this situation is similar across the World.
It would be no surprise to me if this number got worse. Potentially, a lot worse.
When my parents retired you could get an annuity that paid enough for many to live off. But those days are over.
Here is an annuity table I recently took a look at. I would probably need a pension of at least £3m to have the kind of retirement I want.
My pension is nowhere near that.
Negative interest rates are becoming more common, so I don’t want to rely on fixed income products. Especially with global debt going through the roof.
Which brings me on to property.
We are primarily funded by readers. Please subscribe and donate to support us!
The darling of many private investors.
I used to think this was pretty bullet proof from an income perspective. Yes the value could move around, but if you had a property in the right area and targeted the right tenants…..you were fine.
Now I’m not so sure.
Here’s why.
with job security being so tenuous, are you going to be able to get the tenants you want?
Let’s say you can.
People typically sign a 12 months lease, so if there’s a downturn it can take a while to hit the rental market. Appreciate that leases are running out on a monthly basis, but the longer this goes on, the less willing tenants may be to sign on at the same price.
A friend of mine who has several residential properties has told me he’s had to cut the rent to get his tenants. The competition are cutting rent, so to remain competitive he’s had to follow suit.
Hopefully this is just a short-term phase. But if it’s not, then property may no longer be the great income generator it used to be.
Time will tell.
Which brings me on to Gold.
For many gold has been a pariah. A non-starter from an investor perspective…..because it does not pay a dividend.
But with many gold mining companies not only maintaining but also increasing their dividend….that could be about to change.
People may start to view gold as not only a diversifier….but also a source of income – through investment in the gold miners.
If that happens, it could have a profound impact on the gold market.
Exciting eh!
About the author
Simon Popple writes The Brookville Capital Intelligence Report, a weekly report covering investments in commodities. Please go to www.brookvillecapital.com to find out more.


investmentwatchblog--2020-10-27--The Border Patrol Is Monitoring Millions Of Americans’ Cellphones Inside Their Homes

The Feds are using the pandemic as an excuse to ID and track millions of innocent Americans ’ cellphones inside their homes .
This past August , a article revealed the U.S. Customs and Border Patrol ( CBP ) had signed a $ 476,000 contract with Venntel , a cellphone data mining corporation .
Motherboard went on to explain why the Feds signing a contract with Venntel is so troubling .
What Motherboard is saying is that the CBP is using Venntel to monitor Americans ’ cellphones without a warrant .
“ This new contract raises even more concerns about @ @ @ @ @ @ @ federal government and these data brokers , which operate in the shadows and can amass mountains of sensitive personal data without any restrictions , ” Congresswoman Carolyn Maloney , and Chairwoman of the House Committee on Oversight and Reform said .
What makes this even more disconcerting is how law enforcement can use Venntel to monitor every cellphone in a ‘ certain house.
’ “ If you search a certain house , you ’ re only going to get three or four different signals out of there .
I think from that standpoint @ @ @ @ @ @ @ specific people , the first [ Venntel ] source said .
I think that was part of the goal in using it for government customers and things like that , is that you ’ re able to identify devices , and then you can do device searches to see where else they might have been , they added .
A second person who has worked with the company [ Venntel ] said the data in a geofenced area is not going to contain 100 percent of devices in that location , and that @ @ @ @ @ @ @ U.S. senators were so horrified about law enforcement secretly monitoring millions of innocent Americans ’ cellphones that they sent a letter to the CBP demanding an explanation .
The letter asked what legal analysis did the Feds use to justify creating a national cellphone location tracking program ?
It is hard to imagine a more invasive national public surveillance program than what the CBP is conducting right now under our very noses .
The Feds don ’ t care if we know that they are secretly spying on our cellphones inside our homes @ @ @ @ @ @ @ CBP is refusing to justify to Congress how it is legal to ID and spy on Americans ’ cellphones inside their homes without a warrant .
“ CBP officials confirmed to Senate staff that the agency is using Venntel ’ s location database to search for information collected from phones in the United States without any kind of court order , ” the letter signed by Wyden and Warren , and addressed to the DHS OIG , reads .
“ CBP outrageously asserted that its legal analysis is privileged and therefore does not @ @ @ @ @ @ @ We disagree.
” As the Vice article pointed out , the Internal Revenue Service ( IRS ) is also using Venntel ’ s data to ID and monitor Americans ’ cellphones without a warrant .
Allegedly , the CBP and the IRS can not tell what nationality a particular person is based only on the information provided by Venntel , but they can track a particular person ’ s movements throughout the country .
The CBP ’ s admission that it is not restricting its personnel to only use Venntel near the border @ @ @ @ @ @ @ : law enforcement treats everyone like a suspected criminal .
There simply is no justification for a so-called democratic country treating millions of its citizen ’ s like suspected criminals .
Our country is on the precipice of becoming a full-blown surveillance state .

by mapi
The Feds are using the pandemic as an excuse to ID and track millions of innocent Americans’ cellphones inside their homes.
This past August, a article revealed the U.S. Customs and Border Patrol (CBP) had signed a $476,000 contract with Venntel , a cellphone data mining corporation.
Motherboard went on to explain why the Feds signing a contract with Venntel is so troubling.
“The news highlights how law enforcement agencies continue to buy data that may in some cases require a warrant or court order to obtain.”
What Motherboard is saying is that the CBP is using Venntel to monitor Americans’ cellphones without a warrant.
“This new contract raises even more concerns about the cozy and ongoing relationship between the federal government and these data brokers, which operate in the shadows and can amass mountains of sensitive personal data without any restrictions,” Congresswoman Carolyn Maloney, and Chairwoman of the House Committee on Oversight and Reform said.
What makes this even more disconcerting is how law enforcement can use Venntel to monitor every cellphone in a ‘certain house.’
“If you search a certain house, you’re only going to get three or four different signals out of there. I think from that standpoint, you could definitely try and identify specific people, the first [Venntel] source said. I think that was part of the goal in using it for government customers and things like that, is that you’re able to identify devices, and then you can do device searches to see where else they might have been, they added. A second person who has worked with the company [Venntel] said the data in a geofenced area is not going to contain 100 percent of devices in that location, and that identifying someone would be laborious.”
Five U.S. senators were so horrified about law enforcement secretly monitoring millions of innocent Americans’ cellphones that they sent a letter to the CBP demanding an explanation.
“As revealed by public contracts, CBP has paid a government contractor named Venntel nearly half a million dollars for access to a commercial database containing location data mined from applications on millions of Americans’ mobile phones. CBP officials also confirmed the agency’s warrantless tracking of phones in the United States using Venntel’s product in a September 16, 2020 call with Senate staff.”
The letter asked what legal analysis did the Feds use to justify creating a national cellphone location tracking program?
“The senators also requested the inspector general investigate any legal analysis CBP’s lawyers performed before the agency started to use this surveillance tool and how CBP was able to begin operational use of Venntel’s location database without the DHS Privacy Office first publishing a Privacy Impact Assessment.”
It is hard to imagine a more invasive national public surveillance program than what the CBP is conducting right now under our very noses.
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The Feds don’t care if we know that they are secretly spying on our cellphones inside our homes
A recent Vice article revealed that the CBP is refusing to justify to Congress how it is legal to ID and spy on Americans’ cellphones inside their homes without a warrant.
“CBP officials confirmed to Senate staff that the agency is using Venntel’s location database to search for information collected from phones in the United States without any kind of court order,” the letter signed by Wyden and Warren, and addressed to the DHS OIG, reads. “CBP outrageously asserted that its legal analysis is privileged and therefore does not have to be shared with Congress. We disagree.”
As the Vice article pointed out, the Internal Revenue Service (IRS) is also using Venntel’s data to ID and monitor Americans’ cellphones without a warrant.
Allegedly, the CBP and the IRS cannot tell what nationality a particular person is based only on the information provided by Venntel, but they can track a particular person’s movements throughout the country.
The CBP’s admission that it is not restricting its personnel to only use Venntel near the border sends an unmistakable message to Americans everywhere: law enforcement treats everyone like a suspected criminal.
There simply is no justification for a so-called democratic country treating millions of its citizen’s like suspected criminals. Our country is on the precipice of becoming a full-blown surveillance state.


investmentwatchblog--2020-10-27--No Stimulus For You, Failed Economy and Failed Cities/States with John Rubino

John Rubino returns for another weekly installment… Might not be a stimulus bill before the election , which means before @ @ @ @ @ if so .
Let ’ s go through some of the things that would happen @ @ @ @ @ ongoing and there ’ s a number for how low the stock market goes until @ @ @ @ @ ’ s earnings season , and the biggest bright spot will be the gold miners @ @ @ @ @ companies who ’ s interest expenses are greater than their profits .
Stimulus is coming @ @ @ @ @ tanking : NYC hotel occupancy rates now around 10 % , San Fran office vacancies @ @ @ @ @ .
The real story of the Biden laptop is the censorship by Twitter and Facebook @ @ @ @ @ Post-election violence is baked in the cake .

from Kerry Lutz’s Financial Survival Network
We are primarily funded by readers. Please subscribe and donate to support us!
John Rubino returns for another weekly installment… Might not be a stimulus bill before the election, which means before January. Major economic disruption if so. Let’s go through some of the things that would happen. The game is still ongoing and there’s a number for how low the stock market goes until they see reason. It’s earnings season, and the biggest bright spot will be the gold miners. Record number of Zombie companies who’s interest expenses are greater than their profits. Stimulus is coming. Commercial real estate is tanking: NYC hotel occupancy rates now around 10%, San Fran office vacancies surge, apartment rents plunge. The real story of the Biden laptop is the censorship by Twitter and Facebook (and WaPo). Post-election violence is baked in the cake.


investmentwatchblog--2020-10-27--The ECB has found itself pushing on a string

Our focus today shifts to the Euro area where to quote Todd Terry there is indeed “ something going on ” .
We find that the European Central Bank can influence one area of the economy and here it is .
For newer readers wondering if this is high then the answer is yes .
The ECB did not reach such annual rates of growth in either of its two main pushes .
So the slashing of interest-rates in response to the credit crunch and later the imposition of negative interest-rates and mainstream QE bond purchases did not reach this @ @ @ @ @ @ @ context is that the narrow money supply is much larger now so in terms of Euros around ( on this measure ) the push is a real shove .
If we look back we see that there has been a two-stage move with the initial one beginning on the 18th of September last year with the interest-rate cut to -0.5 % and the restarting of QE bond purchases .
It is hard not to have a wry smile at the thought that back then Mario Draghi was setting policy for his successor Christine @ @ @ @ @ @ @ competence of someone he knows well .
Life has sure moved on in the meantime as she is now in a full blown crisis !
This move raised M1 growth from 7 % to 8 % in broad terms .
The turbocharger was applied in March and we have gone to three months in a row of growth over 13 % .
Let me give you an example of the turbocharger in action and remember these are just for last week .
Firstly apologies for the alphabetti spaghetti , I am sure the @ @ @ @ @ @ @ up .
The original QE programme is at the top and added nearly 7 billion Euros and the emergency one at the bottom added a bit over 16 billion .
They also bought over 2 billion Euros of Corporate Bonds .
But in total as the ECB supplied Euros in return for the bonds roughly 26 billion was added to the money supply in one week .
I often get asked about this and the concept here is to attempt to measure what happens to the money supply .
We can not measure @ @ @ @ @ @ @ our measure of economic output called Gross Domestic Product .
The credit crunch era has seen plenty on monetary expansion but only weak GDP growth so velocity has been singing along with Alicia Keys .
This has in the past been described as being like pushing on a string .
If we now bring this up to date we see that Velocity has had a shocker with narrow money growth of a bit over 12 % combined with GDP growth of nearly minus 12 % .
There will be quite a swing in @ @ @ @ @ @ @ a bounce back but looking ahead to this quarter things are getting worse again .
I have previously suggested the Euro area may contract again this quarter and with the implementation of ever more restrictions in response to the Corona Virus pandemic the economic clouds are gathering .
Yesterday brought more news on this front from a country which has had relative success in dealing with the pandemic .
Belgium seems to be in a pretty awful mess and playing a new version of Catch-22 .
I never thought I would be analysing @ @ @ @ @ @ @ will be another plunge if as looks likely now the economy shrinks again with M1 growth of the order of 13 % .
The heat is on here too .
As you are probably expecting much of the shove here came from the narrow money we have just looked at .
The ECB will be pleased to see a pick-up in the rate of growth of “ marketable instruments ” although in these times this could also be for reasons which are not good.We can apply a similar line of thinking to this @ @ @ @ @ @ @ welcome this but it is more of a residual item than a cause .
What I mean bu that is that is that furlough type payments have been combined with an inability to spend in many areas leading to a rise in savings .
We have seen that pretty much everywhere .
So it is hardly a surprise to see bank deposits rising.as they are part of this .
This is is a lagging rather than leading indicator but there was a possible wind of change here .
If we look at what @ @ @ @ @ @ @ in narrow money growth should be impacting the economy towards the end of this year and into 2021 .
The problem is that the economic push is colliding with more Corona Virus restrictions .
Just looking at the money supply suggests a bright economic run but in reality official forecasts are going to need their red pen .
If we look into the detail we see that much of the push is also related to government action .
That is from the M3 series and we get another perspective into things we have @ @ @ @ @ @ @ leading to deposits rising in one area and the ECB via QE financing much of it to prevent any drain on the money supply from the borrowing .
We had got used to some of that but the difference now is the scale as we mull how much of an impact the ch-ch-changes have on the economic consequences of a money supply boost.You may like to look up Goodhart ’ s Law at this point .
Moving on there is another cloud in the sky because the traditional response of banks to a @ @ @ @ @ @ @ So for the ECB it is time to consider the advice provided by Bananarama .

by Shaun Richards
Our focus today shifts to the Euro area where to quote Todd Terry there is indeed “something going on”. We find that the European Central Bank can influence one area of the economy and here it is.
Annual growth rate of narrower monetary aggregate M1,, comprising currency in circulation and overnight deposits, increased to 13.8% in September from 13.2% in August.
For newer readers wondering if this is high then the answer is yes. The ECB did not reach such annual rates of growth in either of its two main pushes. So the slashing of interest-rates in response to the credit crunch and later the imposition of negative interest-rates and mainstream QE bond purchases did not reach this level of percentage expansion. The next context is that the narrow money supply is much larger now so in terms of Euros around ( on this measure) the push is a real shove.
If we look back we see that there has been a two-stage move with the initial one beginning on the 18th of September last year with the interest-rate cut to -0.5% and the restarting of QE bond purchases. It is hard not to have a wry smile at the thought that back then Mario Draghi was setting policy for his successor Christine Lagarde in a revealing summary of the competence of someone he knows well. Life has sure moved on in the meantime as she is now in a full blown crisis! This move raised M1 growth from 7% to 8% in broad terms. The turbocharger was applied in March and we have gone to three months in a row of growth over 13%. Let me give you an example of the turbocharger in action and remember these are just for last week.
ECB PSPP (EUR): +6.733B To 2.309T (Prev -1.883B To 2.303T) – CSPP: +2.208B To 241.524B (Prev +2.137B To 239.316B) – CBPP: +722M To 287.426B (Prev -81M To 286.704B) – ABSPP: -206M To 29.173B (Prev +222M To 29.379B) – PEPP: +16.264B To 616.856B (Prev +15.858B To 600.592B)
Firstly apologies for the alphabetti spaghetti, I am sure the names sound grand when they make them up. The original QE programme is at the top and added nearly 7 billion Euros and the emergency one at the bottom added a bit over 16 billion. They also bought over 2 billion Euros of Corporate Bonds. But in total as the ECB supplied Euros in return for the bonds roughly 26 billion was added to the money supply in one week.
Velocity
I often get asked about this and the concept here is to attempt to measure what happens to the money supply. We cannot measure it directly so the proxy is usually our measure of economic output called Gross Domestic Product. The credit crunch era has seen plenty on monetary expansion but only weak GDP growth so velocity has been singing along with Alicia Keys.
I, I, I, I’m fallin’
I, I, I, I’m fallin’
Fall
This has in the past been described as being like pushing on a string.
If we now bring this up to date we see that Velocity has had a shocker with narrow money growth of a bit over 12% combined with GDP growth of nearly minus 12%. There will be quite a swing in the third quarter as we see quite a bounce back but looking ahead to this quarter things are getting worse again. I have previously suggested the Euro area may contract again this quarter and with the implementation of ever more restrictions in response to the Corona Virus pandemic the economic clouds are gathering. Yesterday brought more news on this front from a country which has had relative success in dealing with the pandemic.
German Chancellor Angela Merkel is planning a nationwide “lockdown light” which could force the closure of bars, restaurants and public events, according to Bild newspaper. Merkel is expected to push for the measure in a meeting with regional leaders on Wednesday where additional curbs are likely to be decided on. ( Euronews).
Belgium seems to be in a pretty awful mess and playing a new version of Catch-22.
Now 10 hospitals have requested that staff who have tested positive but do not have symptoms keep working. The head of the Belgian Association of Medical Unions told the BBC they had no choice if they were to prevent the hospital system collapsing within days.
I never thought I would be analysing money velocity in this way but it will be another plunge if as looks likely now the economy shrinks again with M1 growth of the order of 13%.
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Broad Money
The heat is on here too.
The annual growth rate of the broad monetary aggregate M3 increased to 10.4% in September 2020 from 9.5% in August, averaging 10.0% in the three months up to September.
As you are probably expecting much of the shove here came from the narrow money we have just looked at.
the narrower aggregate M1 contributed 9.4 percentage points (up from 9.0 percentage points in August), short-term deposits other than overnight deposits (M2-M1) contributed 0.4 percentage point (up from 0.1 percentage point) and marketable instruments (M3-M2) contributed 0.6 percentage point (up from 0.4 percentage point).
The ECB will be pleased to see a pick-up in the rate of growth of “marketable instruments” although in these times this could also be for reasons which are not good.We can apply a similar line of thinking to this perhaps.
From the perspective of the holding sectors of deposits in M3, the annual growth rate of deposits placed by households increased to 7.8% in September from 7.5% in August.
In theory the ECB would welcome this but it is more of a residual item than a cause. What I mean bu that is that is that furlough type payments have been combined with an inability to spend in many areas leading to a rise in savings. We have seen that pretty much everywhere. So it is hardly a surprise to see bank deposits rising.as they are part of this.
Credit
This is is a lagging rather than leading indicator but there was a possible wind of change here.
the annual growth rate of credit to the private sector stood at 4.9% in September, compared with 5.0% in August.
Comment
If we look at what we would normally expect then the rise in narrow money growth should be impacting the economy towards the end of this year and into 2021. The problem is that the economic push is colliding with more Corona Virus restrictions. Just looking at the money supply suggests a bright economic run but in reality official forecasts are going to need their red pen.
If we look into the detail we see that much of the push is also related to government action.
The annual growth rate of credit to general government increased to 18.8% in September from 16.5% in August,
That is from the M3 series and we get another perspective into things we have already noted. Governments are spending heavily leading to deposits rising in one area and the ECB via QE financing much of it to prevent any drain on the money supply from the borrowing. We had got used to some of that but the difference now is the scale as we mull how much of an impact the ch-ch-changes have on the economic consequences of a money supply boost.You may like to look up Goodhart’s Law at this point.
Moving on there is another cloud in the sky because the traditional response of banks to a downturn seems to be in play.
Banks tightened their criteria for approving loans to enterprises and consumers as well as the terms and conditions on the credit they did approve, the survey showed. They expected further tightening in the fourth quarter. ( Reuters)
So for the ECB it is time to consider the advice provided by Bananarama.
It ain’t what you do it’s the way that you do it
It ain’t what you do it’s the way that you do it
It ain’t what you do it’s the way that you do it
And that’s what gets results.


investmentwatchblog--2020-10-27--BREAKING: WE SUED GOOGLE IN FEDERAL COURT TODAY!

The lawsuit against Google and YouTube for the illegal PURGE of truth news channels was filed in Federal Court today @ @ @ @ @ .

The lawsuit against Google and YouTube for the illegal PURGE of truth news channels was filed in Federal Court today. Here are the details.
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investmentwatchblog--2020-10-27--170 out of 499 S&P companies have reported Q3 earnings, growth is -14%. Consumer confidence in freef

170 out of 499 S&P companies have reported Q3 earnings, growth is -14%. Consumer confidence in freefall

The most striking data point from this month ’ s US Conference Board report is the absolute collapse in confidence @ @ @ @ @ 15K & below income bracket .
It is the 2nd largest 1M drop on record @ @ @ @ @ by the drop in March at -28.2pts .
pic.twitter.com/xHtFrnPfo8

The most striking data point from this month’s US Conference Board report is the absolute collapse in confidence for consumers in the $15K & below income bracket. It is the 2nd largest 1M drop on record at -26.1pts, surpassed only by the drop in March at -28.2pts. pic.twitter.com/xHtFrnPfo8
— Julien Bittel, CFA (@BittelJulien) October 27, 2020


investmentwatchblog--2020-10-27--Q&A on Fiscal and Monetary Policy

Q&A on Fiscal and Monetary Policy

Last week we had a series of meetings with some of our longest standing clients and learned about what ’ s keeping them up at night .
As a second wave of COVID-19 infections takes hold around the world , many questioned if there ’ s any more firing power left , following the bazooka of fiscal and monetary measures that occurred during the spring .
In this report , we tackle this and other pressing client questions .
Q : How can unemployment and consumer spending both be so high ?
• Unprecedented spending by the U.S. government to @ @ @ @ @ @ @ a supersized application of Keynesian Economics 101 .
When the economy contracts , the government fills the void .
In the second quarter , a 33 % annualized dive in nominal GDP and a 13 % average unemployment rate , was met with a 44 % jump in personal disposable income .
This marked a complete departure from past experiences ( Chart 1 ) .
• Economic growth and income paths usually follow each other , with government automatic stabilizers only partially filling the gaps .
The divergence this time came from a @ @ @ @ @ @ @ , equivalent to US $ 2.4 trillion over the April to June period .
This was the main factor allowing consumer spending to defy recession dynamics .
Q : What ’ s the bill adding up to ?
• Naturally , higher government support means higher debt .
Since March , marketable debt in the U.S. has grown by over US $ 3 trillion .
The IMF has the Federal government ’ s net debt-to-GDP ratio ( net of cash and equivalents ) reaching 107 % by 2021 ( Chart 2 ) .1 @ @ @ @ @ @ @ first time that debt levels have reached such high levels .
In the 1940s , government spending to support the war effort caused the debt-to-GDP ratio to double from 42 % to 106 % over four years .
Over the subsequent three decades , that ratio declined , with government spending as a share of real GDP dropping from a peak of 85 % in 1944 , to 26 % in 1947 .
However , repeating this outcome is highly unlikely .
• The U.S. , along with other countries , is likely @ @ @ @ @ @ @ over the long run .
Before the pandemic , spending as a share of GDP was already just 19 % .
With little fat to trim on non-discretionary spending , the options for a quick resolution are more limited .
Q : Who ’ s paying for this ?
Me ?
My kids ?
My kids ’ kids ?
• There is a long list of options on the table for addressing high government debt .
Higher taxes ( on capital gains , income , sales , and wealth ) are a hot @ @ @ @ @ @ @ parties .
So too are future spending cuts .
Neither path would be well received by everyone .
• This is where central banks can help to ease the burden .
Over the last few months , we witnessed just how much support they can provide .
For the U.S. government , the Federal Reserve ’ s quick actions not only eased financial market dislocation , but it made the cost of debt cheaper .
It did this through a series of programs , coupled with cutting its policy rate to the zero @ @ @ @ @ @ @ push market expectations to be flat on the policy rate for the next decade .
The average interest rate on U.S. government debt is now just 1.68 % , while the average on newly issued debt is well below 1 % .
By keeping rates low , the average rate the government pays on all of its debt will decline over time .
• There ’ s one important caveat here .
This narrative will hold for as long as interest rates stay low .
If rates rise , it would make a @ @ @ @ @ @ @ and more aggressively .
Clearly , the most desirable path before aggressive taxes or spending cuts is to try to ‘ grow ’ out of it .
If GDP growth is greater than the interest rate on debt , it is reasonable that the economy can in fact reduce the debt burden over time .
As the economic recovery gains time , receding support payments are filled by tax payments .

TD Bank
Last week we had a series of meetings with some of our longest standing clients and learned about what’s keeping them up at night. As a second wave of COVID-19 infections takes hold around the world, many questioned if there’s any more firing power left, following the bazooka of fiscal and monetary measures that occurred during the spring. In this report, we tackle this and other pressing client questions.
We are primarily funded by readers. Please subscribe and donate to support us!
Q: How can unemployment and consumer spending both be so high?
Unprecedented spending by the U.S. government to ease the pandemic burden on households was a supersized application of Keynesian Economics 101. When the economy contracts, the government fills the void. In the second quarter, a 33% annualized dive in nominal GDP and a 13% average unemployment rate, was met with a 44% jump in personal disposable income. This marked a complete departure from past experiences (Chart 1).
Economic growth and income paths usually follow each other, with government automatic stabilizers only partially filling the gaps. The divergence this time came from a 75% increase in government transfer payments, equivalent to US$2.4 trillion over the April to June period. This was the main factor allowing consumer spending to defy recession dynamics.

Q: What’s the bill adding up to?
Naturally, higher government support means higher debt. Since March, marketable debt in the U.S. has grown by over US$3 trillion. The IMF has the Federal government’s net debt-to-GDP ratio (net of cash and equivalents) reaching 107% by 2021 (Chart 2).1 This is rare, but not the first time that debt levels have reached such high levels. In the 1940s, government spending to support the war effort caused the debt-to-GDP ratio to double from 42% to 106% over four years. Over the subsequent three decades, that ratio declined, with government spending as a share of real GDP dropping from a peak of 85% in 1944, to 26% in 1947. However, repeating this outcome is highly unlikely.
The U.S., along with other countries, is likely to maintain a structurally higher debt ratio over the long run. Before the pandemic, spending as a share of GDP was already just 19%. With little fat to trim on non-discretionary spending, the options for a quick resolution are more limited.
Q: Who’s paying for this? Me? My kids? My kids’ kids?
There is a long list of options on the table for addressing high government debt. Higher taxes (on capital gains, income, sales, and wealth) are a hot topic of conversation at our virtual cocktail parties. So too are future spending cuts. Neither path would be well received by everyone.
This is where central banks can help to ease the burden. Over the last few months, we witnessed just how much support they can provide. For the U.S. government, the Federal Reserve’s quick actions not only eased financial market dislocation, but it made the cost of debt cheaper. It did this through a series of programs, coupled with cutting its policy rate to the zero lower bound and using forward guidance to push market expectations to be flat on the policy rate for the next decade. The average interest rate on U.S. government debt is now just 1.68%, while the average on newly issued debt is well below 1%. By keeping rates low, the average rate the government pays on all of its debt will decline over time.
There’s one important caveat here. This narrative will hold for as long as interest rates stay low. If rates rise, it would make a compelling case to reduce debt burdens actively and more aggressively. Clearly, the most desirable path before aggressive taxes or spending cuts is to try to ‘grow’ out of it. If GDP growth is greater than the interest rate on debt, it is reasonable that the economy can in fact reduce the debt burden over time. As the economic recovery gains time, receding support payments are filled by tax payments.
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