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5.19.2019 - Free Financial Newsletter Bookmark

A Time Like No Other
 
I have a hunch that all throughout the ages, there have been periods of time where the people were convinced that they were living through something never seen before. There are multiple scenarios that would have suggested that, and while the Bible suggests there’s nothing new under the sun, I beg to differ somewhat.

Ecclesiastes 1:9, “The thing that hath been, it is that which shall be; and that which is done is that which shall be done: and there is no new thing under the sun.”


The people of Hiroshima on August 6th of 1945, had every right to suggest that they had lived through something never seen before, when the first atomic bomb went off above their city. Unless ancient aliens used nuclear power here on earth tens of thousands of years ago ( and they might have by the way) it was certainly something new to the people of Japan.

When the very first cell phone call was made, it ushered in a technological tidal wave, never seen before. The first handheld cellular phone call was made on April 3, 1973, by Motorola engineer Martin Cooper from Sixth Avenue in New York while walking between 53rd and 54th streets.

Cooper hoisted the 2 1/2-pound prototype to his ear and called a rival, Joel Engel of Bell Laboratories at AT&T, to declare that his Motorola team had devised a functional portable phone. “There was silence at the other end of the line,” Cooper recalled to Bloomberg in 2015. “To this day, Joel doesn’t remember that call, and I’m not sure I blame him.”

The clunky “shoe” phone, almost as big as a shoebox, allowed a user to talk for 35 minutes and required 10 hours to recharge, according to Wired magazine.

Motorola spent 10 years overcoming technical and regulatory hurdles, and began commercial service in 1983 using a slimmer 16-ounce model that cost between $3,500 and $4,000.
 
Since those early days, every manner of digital device has appeared before our eyes. The Internet, the personal computer, etc, drove the evolution of a technological “time never seen before.”
 
I had an Uncle that I really got a kick out of. His name was Bill, and he was a lifer in the Air Force. For what ever reason, he and I always got along really well despite the significant age difference. Usually when he was back in the States for a while, he’d call me and we’d get together and chat for a few hours. Funniest man I ever knew.

One day he called me from Japan. He says, “I’m in a store in Japan, and I’m going to bring you a present, are you around next weekend?” I replied yes and sure enough the following weekend he was in the States and visiting. In his hand was a box. I opened the box and there was a telephone in it. But it was the strangest darned thing, there was NO CORD between the handset and the base. This was 1978.
 
He said “Yep, it’s wireless. It’s all the rage in Japan right now, and I thought you might like it.” I had never seen anything like it and frankly neither of us knew if it was going to work here in the states. He assured me that the shop owner said it would. Well, it did. Sort of. It had a habit of ringing in the middle of the night, and when I’d answer it, I’d be listening to the cockpit chatter of commercial airliners flying over head. But hey, it was cool. Everyone that saw it was amazed that I could walk around the house talking on the phone. It had “never been seen before”
 
So, I’m sort of confident that the passage in Ecclesiastes, is not about material things. Even in his day and age, people were inventing things, that have never been seen before.
 
Again, unless mankind has been here for hundreds of thousands of years, and created such things as atom bombs and cell phones in our distant past, before being wiped out time and time again, then it’s obvious, he was talking about mankind. The things he does, the way he thinks, the ways he might plot evil, the way he makes love, makes war, judges, cons, manipulates, gives, repents, etc. In that aspect, yes, history tends to repeat for generations untold. Human nature, is indeed human nature.
 
We that follow the gyrations of the markets, are experiencing a time like no other. While over the course of history, there’s been many a con artist, many a thieving banker, many a swindle, we are in the midst of the most coordinated con job ever foisted on people.
 
Because there’s always been elites and the poor, always been people trying to rig the system, that is NOT new. It’s old as history. But never before did we have the technology to synchronize a scam on a global scale. We do now.
 
Synchronized central banks that can digitally print money out of thin air, and dictate the interest rates to the masses on a global basis, is indeed new. Negative Interest rates have never been found in 5000 years of recorded history.

Negative interest rates are an unconventional, insane monetary policy tool. They were first deployed by Sweden's central bank in July 2009 when the bank cut its overnight deposit rate to -0.25%. The European Central Bank (ECB) followed in June 2014 when it lowered its deposit rate to -0.1%. Other European countries and Japan have since chosen negative interest rates resulting in $9.5 trillion worth of government debt carrying negative yields in 2017, according to Fitch
 
How can anyone with a right mind think that there’s nothing wrong with things, when abnormalities such as this exist?? Likewise the derivative situation. There’s only 1.7 trillion dollars in circulation. You know, those goofy “Federal Reserve notes”. And yet there’s QUADRILLIONS of dollars pledged around the globe in derivatives. Digital moon dust. Everyone just prays that no one calls the bluff, because there’s certainly not enough real money to go around.
 
We’re watching a market that’s completely overbloated by any respectable metric. It has been sent higher ON PURPOSE. First to make the 1%’rs richer, and secondly to keep the entire global economy from imploding on itself. We are in a time unlike any other when it comes to the markets. Buybacks, once Illegal, represent over 70% of our market’s upside movement. Wall Street banks and the NY Fed trade desk, step in time and time again to halt any meaningful market drops.

The market started to really fall back in December, because Powell was talking about hiking rates 4 times in 2019, and everyone knows we CAN NOT SURVIVE higher interest rates, so he quickly had to change course, and put to rest any worry of rising rates.
 
Let me ask you something. If we’re supposedly in the strongest economy “ever” with the lowest unemployment “ever” why is it we cannot endure a more normalized interest rate of say 5%? Because it’s all BS. The magnitude of debt we have is so large, that “normal” interest rates would literally kill the economy both here and around the world.
 
Did you know that in our “strongest economy” that auto loan delinquencies have spiked to the 2009 level?? Did you know that the latest research now shows that 52% of our population lives paycheck to paycheck, and would suffer serious damage by missing just one?? Did you know that 49% of our people can’t find 400 bucks to cover an emergency without borrowing it or selling something?? Or that business equipment production has fallen to 2013 levels and industrial production to 2016 levels?
 
Does that add up to a stock market at all time highs? Of course not. And because the central bankers know how screwed most of the population is, they have no choice but to keep the market going.
 
We are in a world never seen before. Somehow they seem to think that if they just keep lowering rates, keep Juicing the markets, that we can just go on for ever in la-la land. Well, I’m not so sure. They need a way out of this and they don’t have one. They can’t stop printing, and they can’t let rates normalize, or it all implodes.
 
How are they going to get out of this trap?? My guess has been, by manufacturing a crisis. War comes to mind. See all those ships heading to the Mid East? War has been their go-to way of warding off recessions for decades.
 
Something ugly this way comes. I still suggest that between now and 2021 something big is coming our way. War, a market crash, an epidemic, something. We’re in terribly unchartered water folks Be safe out there.
 
As far as this bogus market goes, I believe it “organically” meaning naturally, wants to go considerably lower, but they keep jumping in to prop it up. If they ever stop the propping, we’re going to see a downdraft that could exceed 2008/09.
 
In the near term, the roll over later in the day Friday, from up sharply to going red and seeing the S&P lose its 50 day moving average is the proof that this market wants DOWN. Now the question is, how low will they let it fall before Mnuchin gets on the phone with the NY Fed trade desk, and orders the 6 major banks to buy it back up.
 
How terribly sad. Be nimble out there folks! While they continue to try and keep this afloat, black swans can happen. Be on the lookout.

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