Bitcoin mania hit an air pocket on Sunday with a so-far $11,500 plunge from last week’s record-high $64,858. Groping for an explanation, Bloomberg and other mainstream sources attributed the drop to speculation that the U.S. Treasury might crack down on digital-money laundering. Yeah, sure. This tired story has been marking time for a decade, ever since the days when only a few hardcore gamers knew about blockchain money. Now it is being reheated and served up as a convenient explanation for bitcoin’s nuttiness, much as stories about “tariff fears” and “vaccine hopes”‘ were trotted out each and every time mass psychosis seized traders. Crypto fans had better get used to the crackdown story. Recall that it took almost two years for the news media’s tariff-war allegory to die a natural death. This occurred when the “war” itself became too convoluted for the supposed experts to explain. Eventually, and mercifully, they came to realize that they were only embarrassing themselves when they tried. Now financial writers have trained their wellspring of ignorance on the latest tabloid story involving markets — the epic mania in cryptocurrency. While this may be a welcome respite from sensationalist blather about how Reddit kids were crushing the hedge funds, it hardly serves to explain bitcoin’s rabid swings. So let me try, even though the simple explanation is voodoo stuff that will never surface on Bloomberg or Jim Cramer’s vaudeville show. ‘Hidden Pivots’ Rule! First understand there is no rational explanation for the day-to-day histrionics of deranged markets. The overarching mania is not hard to understand. It exists, and intensifies until climax, because speculators increasingly become convinced they can get rich quickly and with little actual work. However, short-term whoops, dives and spasms can be explained and even predicted only by using charts. Thus can we assume that bitcoin’s big drop on Sunday was unrelated to any particular news. In fact, it began, unsurprisingly, from within 0.1% of a clear Hidden Pivot resistance at 64,953 shown in the chart. As for the ‘crackdown’ explanation, we can be certain it will vanish the moment bitcoin’s bullish rampage resumes. Rinse and repeat. Now for the technical picture. If you have trouble with chart voodoo, stop by the Rick’s Picks chat room and ask about it. Subscribers will tell you that, for all the wild price swings, bitcoin has yet to generate an unprofitable ‘buy’ signal based on a proprietary trick we use called a ‘mechanical’ set-up. Moreover, it would do so again if the current plunge were to hit the green line, a Hidden Pivot benchmark at exactly 50,400. The trade would be predicated on an eventual recovery to $72,230. A word of caution: This trade is not for amateurs or the faint-hearted, since the initial risk, using a stop-loss just beneath the pattern’s point ‘C’ low at $43,123, would exceed $30,000 for four round lots. We have ways to cut that down to $3000 or less theoretical, but you’ll need to immerse yourself in the chat room for a couple of weeks to discover how.
The inflation trade is struggling for loft, a potential victim of its own, wild popularity. “We don’t have strong reflation-trade momentum at the moment because people are waiting for more data,” said Daniel Tenengauzer, markets strategy chief at Bank of New York Mellon. By his logic, all that it would take to stoke inflation would be a little more…inflation. So much for investors’ supposed collective prescience. Tenengauzer and his flock should instead be asking themselves when was the last time every investor on the planet got on the same side of a bet and made money. Answer: never. That hasn’t stopped them from praying that Tuesday’s release of CPI numbers for March will show a significant jump. Don’t these guys know that the harder they hope for statistical evidence of inflation, the less likely it is that the markets will move their way if and when it comes? Buy the rumor, sell the news, as the saying goes. Prominent among those who have made money for clients in the past by betting against the popular wisdom is Lacy Hunt, chief economist at Hoisington Investment Management. The firm’s official position is that “inflationary psychosis” has gotten too far ahead of the real thing. Hunt is an old-timer who well understands how inflation fears can flout reality – for decades, even –causing otherwise astute investors to do the wrong thing. That was the case from about 1980 on, when the few un-fearful investors who stuck with Treasurys made a bundle, racking up capital gains of 15% or more in many years. They outperformed the herd because bond prices at the long end of the yield curve are highly leveraged inversely to small decreases in short term rates. There were blips against this strategy, of course, such as in 1991, when nearly everyone expected the S&L bailout to produce inflation. It didn’t, and the few investors who stood their ground in Treasurys, strips and municipal bonds enjoyed a remarkably good run – one that was to last for nearly 30 more years. Mortgage Debt Is Key The jury is still out on whether the party is over. If so, the spike in Treasury prices in March of 2020 would have marked the last gasp of a nearly four-decade bull market. I am betting otherwise, advising subscribers to position themselves with a “barbell” hedge consisting of Treasury paper versus gold. The unpopularity of both right now is reason enough to stake out a position in them. But there is also logic to support this strategy, since, if inflation ever does go out of control, gold is bound to catch fire. Alternatively, if an economic collapse occurs and plays out in waves of bankruptcies, this would be deflationary and favor T-Bonds, if not for leverage then at least for safety. One thing that is not in doubt is that the U.S. and global economies are headed toward catastrophic failure. It could not be otherwise in a world where financiers reap vast riches by manipulating thinly collateralized assets equal to ten times the value of global commerce involving actual goods and services. A day of reckoning is coming, and it seems most unlikely that it will come via a hyperinflation that would effectively stiff creditors and allow all who owe to skip free. If there are any hyperinflationists out there who can explain how mortgage debt in particular will be repaid with $100,000 bills earned in a week, then please state your case.
Biden’s $2.2 trillion ‘infrastructure’ plan is quite ambitious as far as Government boondoggles go. But what if it’s just the Democrats’ opening bid? “We can do $10 trillion!” exhorted Alexandria Octavio-Cortez in a wild-eyed remark that is unlikely to be challenged by fellow Democrats or the New York Times. Even $10 trillion would be chump change, however, if Biden’s Trojan horse for the Green New Deal births the full-Monty environmental and civic transformation envisioned by AOC, Bernie Sanders, Elizabeth Warren and some other socialist zealots on the Hill. It is ironic that Biden chose Pittsburgh as a backdrop last week to showcase the pandemic era’s first fiscal-stimulus monstrosity. Pittsburgh has been a model for urban redevelopment in the post-War era, having avoided getting sucked into an economic quagmire by its dying steel industry. Instead, the ‘Iron City’ transformed itself into an urban success story with massive investment in health care, banking, higher education, parks and cultural amenities. Is the Federal Government capable of deploying funds so judiciously? It seems unlikely at a time when America’s political leadership has embraced the practice of financing vast Federal outlays with money from trees. Note also that Pittsburgh’s regeneration was achieved over many decades with private investment that sought maximum economic returns. In contrast, Biden’s plan seeks maximum political returns and contains little actual spending on potholes. With a partisan emphasis on social engineering, it seems more likely to clone Detroit’s dereliction than Pittsburgh’s prosperity. ‘Racist’ Highways Indeed, only a reported 5% of the proposed new trillions is earmarked for the repair of roads and bridges. A significant share of what remains evidently would go toward social tinkering and — heaven help us! — improving the weather. That’s what Pete Buttigieg, among others, has in mind, believing as he does that the transportation sector is driving ruinous climate change. Some politicians would use the money to undo damage wrought by ‘racist’ highways. In New Orleans, for instance, there is talk of tearing down the Claiborne Expressway, which, supposedly by design, divided rich white neighborhoods from poor black ones. (Does this imply that ‘divisive’ stretches of I-95 will have to be torn down as well? If you scoffed, then you don’t understand the new political zeitgeist.) There’s also a big push for more electric vehicles, as though they were manufactured and assembled using non-polluting energy and powered by batteries made from recycled milk cartons. There is good news for Tesla owners, though, in the form of $174 billion worth of new charging stations. Fortunately, the mighty wind it will take to electrify them will always be in plentiful supply on Capitol Hill.
The technological wizardry that has given us smart phones, desktop computers, electric cars and flat-screen TVs has masked a pernicious decline in America’s standard of living since the 1950s. One area where this is painfully obvious is the deterioration of customer service. Recall the scene in Back to the Future when a car pulls into a filling station and three attendants jump up to pamper it. One checks under the hood, another makes sure the tires are properly inflated and a third pumps 28-cent gas. Director Spielberg intended this as a wry comment on how much companies valued their customers back then, and how hard they worked to keep us happy. These days, most companies care so little about us that they have cut off access to phone support, even for the most serious problems. The Death of Support A friend recently spent more than fifty hours trying to clear up a billing problem with Amazon. She could not access her account, and each time they reset it she would find herself locked out again the next morning. Although Amazon offers limited phone support, in this case it was useless because the problem was deemed “technical” and unrelated to a merchandise screw-up. It took literally hundreds of phone calls to get nowhere, and every call was impeded by the familiar gauntlet of voice menus. Even with a case number, it took 20 minutes to reach a supervisor. At least a dozen of these guys interceded along the way, creating a daisy chain of broken promises and meaningless apologies. Where abusing customers is concerned, Facebook is in a class by itself, so inscrutable, opaque and coldly uncaring that one might think they’d outsourced call support to North Korea. I was spending as much as $5,000 a month with them on advertising; then, with no explanation, they banned me from promoting on their site. The move seems to be related to their shift to two-step authentication. But jumping through a dozen hoops has yet to elicit an explanation, much less a remedy. The death spiral of brick-and-mortar retailers threatens to put Facebook and other uncaring companies whose chief business is ruthlessly mining eyeballs in charge of a widening swath of our lives. The Good Life, Circa 1955 Concerning the filling-station scene in Back to the Future, we might infer that the three energetic gas jockeys enjoyed certain amenities of the good life that have become increasingly unaffordable for America’s middle class. Here’s a short list, and you can add your own: Stay-at-home moms Poor neighborhoods that were clean and welcoming Four years of college Charming homes in neighborhoods with good schools Doctors who made house calls Human cashiers at checkout counters Socks and shirts in personal sizes Well-appointed railroad dining cars Spacious seats and decent food on airplanes Free checked baggage Milk delivered fresh to one’s doorstep Solid-wood furniture Concerning the ongoing dereliction of customer support, it has made everyone’s life more difficult. Robotic assistance is not merely a poor substitute, it is an affront to customers. Had those of us who grew up in the 1950s been able to visualize the amazing electronic gadgets that are everywhere today, we might have inferred that affluence had reached a pinnacle – that, as William F. Buckley once put it, we would be feasting on nightingale tongues. Instead, we have only the superficial veneer of affluence, much of it in the form of electronic gadgetry, smart appliances and even smarter cars, all purchased with overly generous credit. …while America Crumbles In the meantime, America’s roads and bridges are crumbling, squalid tent and RV encampments have inundated our largest cities, brick-and-mortar retail outlets have become deserted shells — all while public and private debts have mounted beyond reckoning. The retirement system, including Social Security, will fail long before Baby Boomers live to collect their full share. And while Gen-xers and Millennials may be enjoying a golden age of consumer electronics, they appear destined to become wards of a bankrupt state. We can only hope their children revert to some of the tried-and-true practices of the past — to schools that teach, and to a pay-as-you-go lifestyle that does not encumber them with debt. There are no shortcuts and no free lunch, but it is impossible for young people to understand this when both illusions seem to be succeeding so well.
I’ve avoided the pandemic, politics and economic doomsday as topics recently because there’s only so much one can say about them. This is especially true of the coming bear market. Coming exactly when, you might ask? Of course, even the very best of us gurus is unlikely to produce the correct answer, other than in after-the-fact promotional material that shamelessly bends the truth. My own technical work suggests the market may already have topped, since most of the major indexes have stalled within inches of Hidden Pivot targets I’d drum-rolled weeks or even months earlier. IWM, for one, has yet to surpass the 234.82 objective disseminated to subscribers six weeks ago. A proxy for small-cap stocks, it peaked at 234.53 on March 15 and has sold off moderately since. Similarly, a QQQ target at 337.10 that first appeared here five weeks ago caught the peak of a spike on February 16 that hit 338.19. And there was a well-advertised, very long-term DIA target at 327.27 that has been exceeded only slightly so far. Rotate This, Mack! Ordinarily I’d be pretty jazzed about all of these possible tops occurring more or less simultaneously and within easy distance of compelling Hidden Pivot targets. I tend to rely solely on my charts rather than on my gut in order to be reasonably certain about market trends and turning points; but in this instance I am drawn to more subjective evidence. Specifically, the machine-like rotation of buying from one sector to the next that has been occurring routinely is evidence that the crooks who make their living at it are still very much in control of the game. Thus whenever stocks are falling, we can safely infer it is because the crooks are keen to accumulate them at lower prices. Rotation also provides an efficient way to hoist the stock market to higher and higher levels. Indeed, even with practically unlimited sums of Other People’s Money at their reckless disposal, it takes a rising sea of it to float the entire, shoddy edifice to grandiose new heights. Thus, we have weeks when the tech stocks look great, only to turn to dross overnight. The Dow Industrials have seemed to move opposite them lately, but this is only because the chimps who manage your money cannot handle investment themes any more complicated than that: if monkey sell energy, then monkey buy techs; monkey love bank stocks, monkey pummel growthies. The supposed Masters of the Universe don’t meet in smoke-filled rooms to decide such things, either. No, the tactics they employ are driven by motor neurons that control bowels, muscles and glands, not higher reasoning. But the net effect is impressive nonetheless, since whole categories of stocks are efficiently rotated ever higher in cycles that harmonize with the flow of money from greater fools. This is as close as the feather merchants have come to creating a perpetual motion machine, and it challenges one to imagine what could possibly cause the gears to seize. Higher interest rates would be my guess, and they do happen to be rising quickly enough to weaken the entrenched certitude that the Fed knows what it is doing. Chairman Powell’s statement last week that he sees no threat from inflation hardly bolsters the argument that his economic IQ is above dolphin levels. The guy has become an embarrassment, really, although the chimps were so busy rotating OPM that they hardly seem to have noticed.
The rabid mania that has seized the world of investables has gotten so much ink lately that I thought I’d explore an equally curious phenomenon with a far greater impact on our daily lives. Have you noticed how time seems to have taken wing during the pandemic? Each Friday follows the last so quickly that, speaking as a man in his 70s who is rounding the final turn, I struggle to invent ways to keep the months and years from slipping away with equally alarming speed. I have a possible solution, one that could work for you as well that I will tell you about it in a moment. But first let me ask whether you’ve experienced the same thing yourselves. For me, the speed-up of time started to become unsettling when the interval between haircuts seemed to grow shorter and shorter. I typically let six weeks go by, but lately my hair has started to look pretty shaggy after only a few weeks. Or so it seemed. When I started recording the date of my last clip-job on an Outlook calendar, I discovered that what had felt like a mere three or four weeks since my last haircut was actually closer to the normal six weeks. Too Much Urology The same seeming compression of time has occurred in other areas of my life. Dental appointments spaced at four months have begun to feel as though they are popping up twice as often. Biannual visits to my urologist now stare me in the face seemingly every time I flip the calendar. I can hardly keep up with Outlook reminders to send out birthday cards, and yearly payments for life insurance, long-term care coverage and golf-club membership are coming due relentlessly. What could account for this feeling that time is accelerating? Thomas Mann’s opus The Magic Mountain offers a profoundly insightful answer. The relevant chapter is called Excursus on the Sense of Time, and it so lucidly illuminates how we experience the passage of time that I have republished a key excerpt here several times over the years. In the Excursus chapter, Nobelist Mann is the poet-philosopher’s Einstein, a supremely gifted writer at the height of his literary powers. He likely would have viewed the shift toward pandemic-induced sameness in our days as potentially harmful to the human psyche. Indeed, the threat of contagion has severely limited the scope of our daily activities, producing monotony. As to its harmful effects and the ways in which it has altered our perception of time as we experience it, I will quote Mann at length, since no summary could do justice to the luminous truth of his observations. The passage is from H.T. Lowe Porter’s translation, in a Knopf edition, of Der Zauberberg: The Tempo of Monotony Many false conceptions are held concerning the nature of tedium. In general it is thought that the interestingness and novelty of the time-content are what “make the time pass”; that is to say, shorten it; whereas monotony and emptiness check and restrain its flow. This is only true with reservations. Vacuity, monotony, have, indeed, the property of lingering out the movement and the hour and of making them tiresome. But they are capable of contracting and dissipating the larger, the very large time-units. to the point of reducing them to nothing at all. And conversely, a full and interesting content can put wings to the hour and the day; yet it will lend to the general passage of time a weightiness, a breadth and solidity which cause the eventual years to flow far more slowly than those poor, bare empty ones over which the wind passes and they are gone. Thus what we call tedium is rather an abnormal shortening of time consequent upon monotony. Great spaces of time passed in unbroken uniformity tend to shrink together in a way to make the heart stop beating for fear; when one day is like all the others, then they are all like one; complete uniformity would make the longest life seem short, and as though it had stolen away from us unawares. Habituation is a falling asleep or fatiguing of the sense of time; which explains why young years pass slowly, while later life flings itself faster and faster upon its course. We are aware that the intercalation of periods of change and novelty is the only means by which we can refresh our sense of time, strengthen, retard and rejuvenate it, and therewith renew our perception of life itself. Such is the purpose of our changes of air and scene, of all our sojourns at cures and bathing resorts; it is the secret of the healing power of change and incident. Using Your Yard Creatively So how can we “rejuvenate our sense of time” as the pandemic’s grip on our daily lives begins to loosen? Enjoying the outdoors has been an obvious answer all along, but other avenues are beginning to open up as more people get vaccinated. My idea –something you or anyone else can do — is to produce a backyard concert with a neighbor. Friends of mine in Boulder have been doing this for years, but the pandemic put a temporary halt to it. With spring approaching, however, it’s a perfect time to revive this kind of low-key entertainment. Musicians are hungry for work, and their fans are more eager than ever to hear them “live”. Because musical talent is so underpriced, you can hire the very best in the world at an affordable price, especially by passing the hat at the end of the show. To inspire you, here are links to YouTube videos of three favorites of mine whose music I’ve enjoyed in intimate settings, including the basement of a friend’s home: percussionist Rony Barrak; blues harp player Mark Ford; accordionist Alicia Baker and pianist Joanne Brackeen. Each is as talented as anyone you have ever heard in a large concert hall, and all it would take to hire any one of them is a phone call to their agent or the local musician’s union. Live theater, dance and chamber music are just as affordable and available for the asking. Call a local or regional repertory theatre to get things rolling for a great summer’s night in your own back yard. They’ll be thrilled to hear from you.
No one said it would be easy to get short at the top. This bull market is proving especially challenging to fade because the herd knows how grotesquely overvalued stocks are. With so many traders eager to bet the ‘don’t’ line, the broad averages have started to behave like El Diablo (see photo above). The Dow has staged three 600-point-plus rallies-to-nowhere since peaking two weeks ago, but none lasted for more than a day. Although bull riders must hang on for eight seconds to claim a prize, traders could conceivably have to endure weeks or even months of loco price action to hit it big. Many will get busted up badly trying. The ‘everything bubble’, as it is called, is wherever one looks: stocks, bonds, real estate, art…African American Barbie dolls. There are more homes listed for $5 million and up than there are Smiths in the Manhattan phone directory. Ironically, gold and silver are among the few investable assets that are not in a bubble. That tells you how badly the players have misjudged the risks of a financial cataclysm. They’ve gone all-in on bitcoin instead, as though scarcity alone could make cryptocurrency money, a store of value or a hedge against the crash that is coming. Fed Quackery Fed Chairman Powell’s every utterance has been the obsessive focus of economists and pundits who make their living taking the central bank’s monetary quackery seriously. Does anyone actually believe that credit stimulus will produce an economy healthy enough to service the trillions of dollars in debt we’ve accumulated desperately trying to keep an asset bubble from deflating? The effort is not only doomed, it is likely to to produce a deflationary collapse featuring a strong dollar and crushing real rates of interest. Sound impossible? Not with everyone on the ‘inflation’ side of the bet, it isn’t. Even $10Tr-$20Tr of helicopter money is just a drop in the bucket compared to the deflationary juggernaut represented by global trade in financial derivatives. It is $2 quadrillion in size, every penny of it effectively a short position against the dollar. If you think the short-squeeze run-up in Gamestop shares was crazy, wait till you see the world’s desperate bet on inflation unwind.
The global credit-blowout has stoked fears of a money-printing catastrophe like the one that wrecked Germany’s economy a hundred years ago, planting the seeds of World War II. However, even a cursory look at the Weimar hyperinflation of 1921-23 reveals why it is extremely unlikely to happen again, especially on a global scale. It was a local event involving physical paper currency that would be nearly impossible to replicate using a global reserve dollar, particularly at a time when digital transactions overwhelmingly dominate. The German hyperinflation featured literal boxcars of D-marks delivered weekly to the biggest employers. The country was a ‘union shop’, so to speak, and the sums sent to workers ahead of each payday were continually renegotiated to include an adjustment for inflation. The system was put in place in order to hold down unemployment and worker unrest. It worked so well, at least initially, that the Germans enjoyed lower joblessness in 1920-22 than some of the Allied nations that had defeated them in The Great War. Money by the Boxcar The money-filled boxcars pushed the exchange rate to an extreme, in 1923, of 4.2 trillion marks per dollar. However, the periodic spikes in money creation that quickly ramped inflation to this level were caused not chiefly by official money-printing, but by employers who issued their own scrip. This was by agreement with the German government, which was fearful of riots if workers were not paid on time. In fact, Germany’s money presses, stressed to the limit, did break down a couple of times during the 1921-23 period. Employers reacted to this emergency with such patriotic vigor that it was immediately following each of their scrip-a-loozas that inflation took unfathomable leaps. No similar mechanism or infrastructure exists to ramp up the physical supply of U.S. dollars. Although it is all too easy for the Fed to create asset inflation, even this is predicated on having the ginned-up dollars borrowed into existence. That’s why wage inflation could not be used to keep deflation at bay. Nor can helicopter money stave off yet another juggernaut of deflation bearing down on us, the collapse of the public-employee pension system. It is coming, and one need only imagine how it would play out to understand why “the Government” (i.e, taxpayers) will not be able to rescue “us”. Illinois is out front in the race to failure, but two dozen other states whose pension systems are nearly as bankrupt would line up quickly for their fair share of bailout money. Although this scenario represents a theoretical path to hyperinflation, it would detumesce quickly when the generous checks sent out each month to pensioners in 25 states became nearly worthless over just a few short months. Potato-Rich For those who would value gold and silver above all in the event of a financial collapse, keep in mind that you cannot eat either. Arable land was the best asset to own during the German hyperinflation. If you’d financed the purchase of farmland at 100% just before inflation began to take off in the spring of 1921, you could have paid back the entire loan with profits from your first harvest of potatoes. All of the facts cited above are from Adam Fergusson’s extraordinary book, When Money Dies. The work is a must-read for anyone who thinks it would be easy for the Fed to hyperinflate a global-reserve currency so that the U.S. could effectively renege on debt that even now is unpayable. The book is available in paperback from Amazon for $15.
They don’t ring a bell at the top of bull markets, as the saying goes, but perhaps this time it will be different. Indeed, every sentient guru and talking head who is not shilling for Wall Street is properly bearish, and even the chimpanzees who make their living rotating Other People’s Money into flavor-of-the-month investment themes were beginning to doubt the stock market’s sanity. If a much-needed 10,000-point drop in the Dow is coming, consider it electroshock therapy. Unfortunately, it’ll probably take a lot more than that to purge the markets of mental illness as serious as we’ve seen in recent years. Speaking as a trader and a chartist, I’m looking forward to the violent price swings that likely lie ahead. The Hidden Pivot Method turns out to work best when things get really crazy, as occurred during the dot-com mania and the Great Financial Collapse of 2007-08. It will be interesting to see whether the Reddit kids have scared off institutional heavies who might otherwise get short up the wazoo over the course of a bear market. My hunch is that they will still short like crazy but avoid doing so in individual stocks that could attract dangerous attention. Keeping Suckers in the Game Getting short will not be a piece of cake, since a bear market as long overdue as this one is going to attract many players who are all-too-eager to pick tops. We’ve tried it ourselves recently using Hidden Pivot targets that precisely nailed peaks in several indexes, although not in IWM, a small-cap vehicle that still has a major target outstanding 4% above, at 234.82. Like so many amateurs, we got spooked out of some DIA puts on Wednesday when the Dow rallied nearly 500 points. That’s the way it’s going to be the whole way down, although it could take an occasional 2000-point short squeeze to ward off bears and keep buy-the-dips mouth-breathers and hopeful suckers in the game. Check out the Rick’s Picks Facebook page for a short list of 2x and 3X bear bets you should avoid. You’ll have better odds of growing your nest egg buying scratch-off lotto tickets and betting on 70-to-1 horses.
[Dear readers, I am taking a desperately needed break from telling you why a stock market crash is long overdue, and why Biden & Friends are finally going to make it happen. Full disclosure: I have not read a newspaper or watched the news since November. RA ] We’ve all grown so weary of spam callers pushing auto warranty coverage that voters would probably support the death penalty for the slimebags responsible for these calls. The recorded voice says “This is your final notice. The factory warranty on your vehicle is about to expire,” or some such. I get about ten of these calls a week, and although they used to spoof Colorado phone numbers because I lived there for 20 years, lately the calls have been coming from all over the U.S. How We All Pay Do we dare take encouragement from reports that Sen. Charles Schumer has been receiving these calls like the rest of us, and that he is so pissed off that he has vowed to do something about it? “Not only are these calls a nuisance,” he told the New York Times, “they also tie up land lines and can eat up a user’s cell phone minutes, possibly leading to a higher cell phone bill due to overage charges.” Schumer, arguably the most powerful member of the U.S. Senate, has called for a federal investigation into “robo-dialer harassment.” He’s even gotten headlines with a call to war: Schumer Urges Inquiry of Companies Behind Bogus Auto Warranty Calls announced the Times. Sounds promising, right? Wrong. The headline is actually from 2009 (!!), and you can judge for yourself how much progress the Senate majority leader and his colleagues have made ridding us of the auto warranty plague. Sadly, a Google search would seem to suggest that 2009 was the last time any of the do-nothing reprobates on Capitol Hill were fired up enough about auto warranty fraud to make a stink about it. The Fine Print The warranties actually exist, by the way, but there are few known instances of a customer having gotten good value for his money. More often, claims are denied for contractual reasons divulged in microscopic print. Even so, voluminous complaints lodged with the Better Business Bureau seem not to have discouraged the motorist driving a 20-year-old heap from believing that some sleazy peddler of service agreements will pay to replace his transmission with 240,000 miles on it. If we can put a man on the moon, you might ask, then why can’t we put a piece of human crud who operates a server farm in Kazakhstan in jail for clobbering America each day with scores of millions of these calls? Unlike the alleged “war on poverty,” this is a war we can win. It’s not as though Schumer’s best and brightest couldn’t find the guy, try him and string him up by his thumbs if the effort had the wholehearted backing of the U.S. Senate. Hey, Chuck: Call me! I know some sleuths who can get the job done. It’s a great opportunity to raise Congress’s approval rating from the disgraceful mid-teens into the merely shabby low thirties.
Been vaccinated yet? I haven’t, although I’m trying not to give friends the impression that I’m making some sort of political statement. That means not emailing them links to every vaccine horror story that surfaces, or to growing evidence that the vaccine may not be all that it’s cracked up to be. That mRNA vaccines have not been well-tested and could conceivably cause bodily harm or death is beyond argument at this point. That is why I am waiting until most Americans have gotten their shots and reported any side effects before I decide whether to get mine. The person I trust most about this is my personal physician, who also happens to be one of my oldest friends. He was quite confident back in April that the combination of hydroxycholoroquine, zinc and Zithromax was highly effective in treating Covid. This was an unpopular view at the time; indeed, half the country was rejecting it merely because it had Trump’s endorsement. However, my friend had already treated two dozen Covid patients, and all but one recovered without getting very sick. The one patient who fared poorly, a mutual friend, had waited until ten days after he’d shown symptoms to start treatment. Two Brothers Part Ways My physician friend had no qualms about getting vaccinated himself, especially since he sees so many patients who are infected. He does a weekly radio show and undoubtedly has influenced many, including some who were as skeptical as I am, to get their shots. However, his brother, a surgeon, has so far chosen not to get vaccinated, mainly because of a bad reaction he once had to a flu vaccine. I’ll be monitoring the health and progress of two close friends in particular, since they’ve been scared to death to leave their homes since lockdowns began last March. Both have just received their two shots spaced a month apart, and both have seized the opportunity to get back to more or less normal life. One is a wine importer whose business requires frequent trips to Europe. He hasn’t flown anywhere in the last year, but next weekend he’ll be traveling with his daughter to Vail for a week of skiing. For a guy who could not even set foot in a grocery store or post office, immersing himself in a crowded ski resort at high season will be an act of daring. A Powerful Inducement The other friend, a retired entrepreneur, has a scary medical history and has therefore lived under an even stricter lockdown than the wine importer. So fearful was he of catching Covid that he chartered a jet to fly him and his wife from New Jersey to Florida and back last fall. His passion in life is high-stakes poker, but neither he nor any of his poker buddies have played face-to-face in nearly a year. A poker game surely ranks high on the list of superspreader events, given the constant banter in close quarters and the circulation of contaminated cards and chips. Even so, the group recently restarted their regular game, and although they are not oblivious to the risks, they are no longer prisoners in their own homes. For those of us who are 70 or older, this kind of freedom will remain a powerful incentive to get vaccinated even if the risks prove to be considerable.
This is a perfect time to catch up on the best of television, since so many of us are watching more of it these days, particularly on Saturday nights. I’ve been assiduously avoiding all news for the last month or so and am faintly aware of the impeachment proceedings and Biden’s energy pipeline kill-shot only because they were mentioned by subscribers in the Rick’s Picks chat room. My self-imposed news blackout has been as tight as I, a lifelong news junkie and former newspaper editor, can make it. I canceled a subscription to the Wall Street Journal that had run for nearly 40 years, and I don’t even watch Tucker anymore, let alone network or local news. Serious collateral damage from the red/blue color war still raging in America has so far amounted to the loss of two friendships, one of them stretching back 65 years. When I was scheduled for chemo and radiation, my good buddy came down to Florida to see me through a horrific first week that was to have included massive infusions of metal-heavy chemicals and enough X-ray exposure to kill just about any living thing. At the last minute, I opted instead for a so-far successful surgical treatment at M.D. Anderson Center in Houston. This allowed my friend and I to spend the week taking epic walks on the beach, enjoying South Florida’s great restaurants, and discovering the pleasures of Delray’s Asian massage parlors, a shadowy niche he has spent his adult life exploring. He is from the theater world, a founder of one of the country’s most successful non-profits. He is also a self-described anarchist, espousing political views that could not be further from mine. ‘A Killer of 450,000 Americans’ This was never a problem before Trump. In the end, though, with just a couple of condescending text messages from him, our friendship was over. No more dialogue, he admonished, until I “get things sorted out.” This was an allusion to my certitude that the election was stolen — an opinion that I had kept to myself in our emails over the last several months. No matter, it would seem. He was giving me an ultimatum to either see things his way of cease communication. And so I let the dialogue rest there rather than let fly with the kind of invective that would have killed any chance of reconciliation. I even gave him the last word when he texted the absurdity that “my guy” had “killed 450,000 people” with Covid. With that pfft of flatulence, one of the brightest, most articulate guys I know became a lame-brained horse’s ass, one more liberal so arrogantly certain of his moral superiority that he regards anyone who disagrees with him as literally crazy. And now to the best on television. I stumbled upon Netflix’s Ozark last night after tiring quickly of the highly recommended but overrated Gomorrah. While polling an astounding ‘8.7’ stars on IMDB, Gomorrah is just a thinly plotted, garden variety shoot-’em-up involving warring mafia clans in Italy. Ozark, however, is a real class act. Its producer, director, writer and star is Jason Bateman, who brings a quirky kind of realism to every project he’s involved in. Here, Bateman’s character, a by-the-numbers financial planner, agrees to launder drug money in Lake of the Ozarks, Missouri, for a vicious Mexican cartel boss who’d marked him for death. A ‘B&E Magician’ In episode two we meet the redneck Langmore clan, including teen daughter Ruth, whom the local sheriff describes as a “B and E magician.” The scene where Bateman tries to recover a pile of drug money from the Langmores ranks with the best television I’ve ever watched. Some other favorites include: Deadwood, Mad Men, The Sopranos, The Queen’s Gambit, Boardwalk Empire, Peaky Blinders, 24, Billions and Marvelous Mrs. Maisel. All are way better than anything that has come to the theaters in recent years. Who needs AMC, Marvel comic-book heroes and imitation-buttered popcorn when you can get the real thing for practically nothing at home?
The news media went all-in over the weekend trying to explain the significance of the Gamestop saga, but because few traders were asked about it, there was little in this torrent of analysis to enlighten. Most of the reporters, talking heads and pundits focused on the obvious, sensationalizing a story about how the little guys have drawn first blood and are about to stick it to giant hedge funds by targeting their short positions. This kind of claptrap makes for salacious reading, but there’s a much bigger story that has so far gone untouched. Before I explain, here’s some point-and-counterpoint to get you past the disingenuous swill being dished out in the blogosphere and by the mainstream media: Popular Narrative: The Reddit/Robinhood mob (RRM) has declared war on hedge fund biggies, and so far the smart money has been getting its butt kicked. Reality: The damage so far is just a mosquito bite on the behind of hedge fund elephants like Steven A. Cohen, and the Reddit mob a five-year-old who has discovered where Daddy keep the matches. PopularNarrative: “We’re going after Citadel next!” Reality: Nice try, kids, but this kind of hubris is going to boomerang on you. As a rallying cry, it makes good headline fodder, since the name ‘Citadel’ conjures up the financial establishment’s most impregnable fortress. In the end, though, you can bet on Citadel & Friends to change the game so that the edge you pishers currently enjoy evaporates quickly, assuming it hasn’t already. Popular Narrative: “After Citadel, we’re going to squeeze shorts in silver.” Reality: We’re actually rooting for you on this one, since precious-metals markets are manipulated by unmitigated scumbags. And, yes, your merely having announced last week that silver is in your cross hairs seems to have provided a little added boost to silver quotes on Thursday and Friday. But before you take on the commodity markets, better read up on Nelson ‘Bunky’ Hunt, a billionaire when that was real money, but also a trader smarter than all of you put together. He got crushed trying to corner silver even though he’d done everything right. Hunt would have succeeded if Comex had not raised margin requirements to such heights that only two players were left in the game: Hunt and Eastman Kodak. This killed speculative demand, and eventually Hunt himself. Popular Narrative: The Reddit/Robbinhood mob (RRM) has been making money hand-over-fist. Reality: The number of big winners is probably far smaller than imagined by the blogosphere and news media, and the sums are smaller. Don’t assume that all of the greedy little guys got out at the top, or that they will. Some will predictably become such believers in their omnipotence that they may actually buy the top, as occurred at the end of Bitcoin’s first mania. Popular Narrative: The little guys have outfoxed the smart money. Reality: For a nanosecond, maybe. But how smart are they, really? Probably not one of them in 500 understands that certain option strategies they love to use, such as covered-writing exploding stocks, can backfire lethally. In fact, out-of-the-money options they’ve sold can be exercised, and this can happen well before the options expire. The unavoidable result is a stock-settlement mismatch that can turn seemingly winning bets into unanticipated disasters overnight. We may be hearing more about this soon. Popular Narrative: Regulators will soon put a stop to this nonsense. Reality: No, they won’t. For one, the kids haven’t actually broken any laws; targeting shorts is nothing new, and it is only the ease of doing it in the blogosphere that is causing regulators to gnash their teeth and tug at their hair. For two, the ability of institutions and other players to short stocks with little hindrance is essential to keeping the markets running smoothly. The Power of Desperate Buying Now to my salient point, and it is this: A mere week’s worth of short-targeting shenanigans has permanently altered the game in ways that will have deep and lasting consequences. To be clear, let me say again that SAC, Citadel and the Comex do not fear the mob on social media; rather, they understand that the would-be giant-slayers eventually will self-destruct because of their ignorance, inflated self-importance and reckless boldness. However, the Smart Guys do recognize that the war is asymmetrical, since the little guys don’t need to put any skin in the game to trigger off a massively costly short squeeze. All the little guys need do is mention in a chat room that a particular stock has short interest greater than, say, 25% of the float, and the squeeze is on. This kind of war is so very asymmetrical that Big Money cannot possibly fight it. What this implies is that over time, short interest will eventually diminish to the point of insignificance. The bottom line for the stock market is that bull markets will become less bullish, and bear markets more bearish. Why? Consider that short covering is the most powerful propellant of bull markets. That’s because it is the only source of demand sufficiently urgent to push stocks through otherwise impenetrable layers of supply and daunting prior peaks. I say ‘urgent’, but ‘desperate’ is probably more accurate, since short covering is driven by margin calls from brokers frantically worried about a customer’s solvency. When we talk about buying the dips, the main buyers on market weakness, even moreso than bargain hunters, are short-covering bears. How Bear Markets Work Short-covering is also the force behind the breathtaking rallies that occur in bear markets. From a psychological standpoint, the “purpose” of these rallies is to convince investors that stocks have turned the corner and are in a sustainable rebound. Short-squeeze spikes are a routine feature of bear markets, and they recur until an exhaustion spike going in the other direction destroys the last vestige of hopefulness. But because short-interest numbers are about to decrease in the aggregate, it is predictable that, henceforth, short-covering will have less and less power in bull markets and bear markets. In the coming bear market (which my technical runes suggest may already have begun), we are likely to see downtrends that are more relentless than in the past, and sucker rallies that are not quite powerful or persuasive enough to keep hopeful losers in the game. For now, though, as the big players attempt to shrink their short positions, their efforts will remain fully exposed and vulnerable to raids by the mob. The result will be wack-a-mole rallies in overly-shorted stocks for the foreseeable future. This will continue even as the stock market moves deeply into bear-market territory. However, the rallies will be isolated and add little boost to the broad averages. They may even act as a psychological depressant, a nagging reminder that global securities markets were never more than a giant casino game to begin with.
A little more than two decades ago, amidst the wild excesses of the dot-com boom, I wrote what turned out to be an epitaph for those heady times in the The San Francisco Examiner. It bore the headline Monsters from the Id Threaten the System, a metaphorical nightmare that I’ll explain shortly. Then as now, vast quantities of money driving stocks to absurd heights seemed practically limitless. ‘Easy Al’ Greenspan was in charge of the Fed, and the loose monetary policies he pursued reflected some of the crackpot ideas he evidently brought with him from Columbia University’s PhD program. A fat lot of good they did him; for on numerous occasions, Greenspan would laughably refer to inflated home prices as “wealth.” He would also tout a supposed investment boom at a time when household savings growth was negative. As every freshman economics student knows, investment cannot exceed savings, and we cannot increase investment unless we cut back on current consumption. And yet, here we were, consuming and borrowing like crazy but still somehow “investing” in the future in defiance of immutable economic law. Bread and Circuses It would seem that most economists these days continue to believe fervently in Greenspan’s monetary Rube Goldberg contraption. Still worse, the charlatans at the central bank who keep it lubricated and running somehow command nearly universal respect. This should probably come as no surprise, given all the bread and circuses that money-from-trees has begotten us. Few seem concerned in any event that as stock market valuations have climbed to insane heights, global debt in its many shapes and forms is approaching two quadrillion dollars. Let me type that out for you: $2,000,000,000,000,000! Most of it is swirling around in derivatives markets that are notionally ten times the size of global trade in real goods and services. Quite a bit of that “wealth” has been leveraged from the cash flow of giant companies such as Google and Facebook, both of which are glorified advertising firms that produce almost nothing of tangible value. If you and I could create a derivatives market for little guys, just think of all the things we could do with the effectively costless billions it would throw off. For starters, to take a dubiously intangible example, how about a cloud-based firm to promote the health benefits of meditation? Separate billions could be borrowed to create teaching materials, and billions more to package bonds tied to the revenues the teaching materials could conceivably produce in a score of lifetimes. Wharton School grads working downstream of the bonds could churn out swaps and reverse floaters to sell to CalPERS and insurance companies. Getting rich off businesses that create nothing can be complicated, so there would always be plenty of work for lawyers, accountants, lobbyists, politicians, financiers and regulators. Monsters from the Id Concerning Monsters from the Id, they were the unseen enemy in the 1950s sci-fi classic Forbidden Planet. The creatures lurked in the subconscious of the Krell, an advanced civilization on the planet Altair-4. Their scientists and engineers colluded to achieve a technological pinnacle, building a fusion reactor that could be used to materialize anything one might conjure up in one’s mind. This worked beautifully for whipping up gourmet dinners on short notice, or producing flawless 10-carat gemstones for paperweights. But at night when the Krell went to sleep, creatures that inhabited their vestigial, primitive subconscious arose from nightmares to terrorize them, sometimes tearing them limb from limb. Here on Earth we have succeeded in creating a crude version of the Krell reactor. It responds mainly to greed, and it is explicitly designed to serve a primal desire to get rich with little or no work. To this end, the Fed’s digitally enabled ‘reactor’ has been churning out hundreds of trillions of credit dollars for years. You’d need a PhD in economics to believe that this process can continue indefinitely, or that the supposed wealth it has created will outlast the illusion. Remember, for Fed stimulus to work, the money has to be borrowed into existence. Under the circumstances, it is both predictable and inevitable that some change in our lives will make people suddenly shun borrowing. Perhaps a turn for the worse in the pandemic will cause this, or an upward spiral in interest rates when market forces eventually demonstrate yet again that there is no free lunch. It is at that point that “money of the mind” will turn into digital cement, ending a bull market in stocks that has outlasted even the hardiest skeptics. ______ UPDATE (Jan 26, 8:23 p.m. EST): Speaking of the Id, of fear and greed, so many stocks are going hypersonic these days that we are probably closer to the end than I’d imagined even a week ago. And the thing is, everyone knows it — except for the little twerps who have traded their gaming consoles for Robinhood platforms.
Those who write about such things have attributed virtually every stock-market rally since March 23 to ‘vaccine hopes’. They have overworked and over-hyped this phrase with no sense of irony or awareness; for it is not so much ‘hope’ that has powered stocks to insane levels, but monetary stimulus pumped liked steroids into a beast that was rabid to begin with. This is the kind of ‘hope’ that T-Rex must have felt when it cornered a chubby dinosaur half its size, or that a drug addict might feel after springing the lock on a cartel storage locker filled with white powder. ‘Hopeful’ is far too modest and gentle an adjective to explain the mass psychosis that has gripped Wall Street over the last ten months. When Bad News Is Bad News Now that a vaccine has finally arrived, however, it is fair to ask what will keep speculators’ hopes inflated to infinity. Under the best imaginable circumstances, it will probably be at least two years before we can look back on the pandemic and marvel at how we finally beat it. We’ll know this has happened when salad bars re-open, subway cars are packed with commuters, and nursing homes welcome visitors with open arms. Does anyone on Wall Street actually believe this is how things are about to play out? More realistically, the stories we will be hearing — about vaccines that have never been tested on animals or even on significant numbers of humans — will be scary ones: injection-related deaths, bizarre symptoms, transmission of Covid by the inoculated and the asymptomatic, sterility, vaccine-resistant mutations, inscrutable infection spikes in places locked down like fortresses. At that point, such hopes as remain will be vested in the central bank and its perceived willingness to step up interventions on bad news. If investors are counting on the bad-news-is-good-news delusion to persist in 2021, however, they are in for a rude awakening. They have bought the rumor for nearly a year; now it is time to sell the news before it becomes gravely worse.
Stocks have turned timid, although it remains to be seen whether the moderate selling that ended the week will gain momentum as Biden’s inauguration approaches. Regardless, the smell of distribution is in the air, and it is not subtle. As the tempo of it picks up, expect DaBoyz to work overtime trying to convince us that Wall Street is down with the Democrats. Big Business owns Biden, right? Well, yes and no. It’s true that the Silicon Valley muckety-mucks have less to fear from him than from Trump. But there’s no getting around the scary fact that this will mark the most radical political change in U.S. history. Most of Biden’s appointees are familiar faces from the Obama years, and that has reassured those who hope to benefit from the Democrats’ electoral sweep. But the political checks and balances that existed when Obama was president no longer obtain, and one-party rule could conceivably run amok in ways that Biden’s corporate cheerleaders have failed to anticipate. A Fragile Economy For the time being, though, the vaccine program will get most of the attention. Biden and the Democrats will own it in just a few days, but its success is hardly assured. His procedures and protocols for dealing with the pandemic are unlikely to differ much from Trump’s, since there is not enough hard science to justify changing things radically. The danger is that even a small tightening of the lockdown could undo an economy whose fragility has been masked by the powerful bull market in stocks. Do the Democrats understand this? We may be about to find out. But there should be no illusions in the meantime that the Democrats, cozy as they are with Silicon Valley and social media’s opinion-shapers, will be great for stocks.
With gold’s gratuitous, 4% plunge on Friday, bullion has once again affirmed its reputation as one of the nastiest, most frustrating assets an investor can own. Its chief enemy is a global network of shamans, thimble-riggers and feather merchants who make their living borrowing bullion from the central banks for practically nothing, then lending it to everyone else for slightly more. They are always looking for excuses to pound quotes so that they can replace what they’ve borrowed at a lower price. Helpful to this goal is a story that, however ridiculous, spooks gold bugs into dumping their holdings. The current story is that the Democrats will somehow be bad for bullion, although no one can say exactly why. To believe such claptrap is to implicitly believe that when Kamala Harris takes over for the mentally failing Biden, she will impose rigorous constraints on spending that will strengthen the dollar. Yeah, sure. But that’s not the point. The balance of power is about to change so radically in Washington that no one really knows what will happen next. For all we know, the Republic might not survive until mid-term elections in 2022. If such a grave crisis is in fact bearish for gold and silver, then Harris, Schumer and Pelosi are bullish for America and the dollar; Greenspan, Bernanke and Powell were skinflints; John Wayne was a homo, and beer causes cancer. Biden’s Replacement The bottom line is that we should tune out bullion’s rigged swoons until the crooks and shysters are ready to let it run. Sometimes it takes courage and conviction to stay the course, and this is one of those times. The chart shows that gold’s correction since August has been moderate and that when it ends, there is potential for further appreciation to at least $2290/oz. That’s a 25% gain from current levels — sufficient to outperform the broad stock averages just as bullion has reliably been doing for years. There is just one caveat for gold bugs — the possibility market forces will make it impossible for the Federal Reserve to continue doing ‘whatever it takes’ to keep the asset bubble fully pumped. It is one thing to force-feed money into the economy so that consumption does not collapse. But will the central bank be so accommodating when it is a cavernous socialist maw demanding to be fed? Well before then we could see market forces that have been pushing up Treasury rates recently make further easing impossible. Tightening is not even remotely on investors’ radar at the moment, but even a small turn of the screw would devastate stocks and bullion. The former would likely be down for the count, while gold and silver might be expected to get second wind once investors figure out that Tesla, bitcoin and junk bonds are poor places to store wealth. Hold onto to your ingots and doubloons in any event, since, in the worst of times, they are certain to retain their purchasing power relative to all other types of investable assets.
[Note: This essay ran earlier in the week but I am re-running it because Copper broke out today on the long-term chart, hitting a so-far high of $3.71. RA] Copper prices are up 75% since cratering in March at $1.97 a pound. Since ‘doctor’ copper, with a supposed PhD. in economics, has a reputation for accurately predicting growth trends, does this mean a global boom is at hand? This seems most unlikely, given the vast expansion of public debt used to temporarily counteract the economic effects of the pandemic. The debt, many trillions of dollars’ worth, is the direct cost of supposed stimulus, which, as any idiot can see, has catalyzed asset inflation rather than any real economic growth. Unfortunately, when the party ends there is no way we will evade repayment, even if it means depreciating the dollar to zero via hyperinflation. There is only one alternative, a deflation that would effectively cancel all debts with a wave of bankruptcies at every level of the economy: public, corporate and private. Neither path is palatable, but it is virtually certain that one or the other, or perhaps both sequentially, will occur, since our collective debts have grown far too large to repay with hard money. Purely Speculative Concerning the chart, it shows that copper prices have stalled in a very crucial place, precisely at a $3.63/pound ‘midpoint Hidden Pivot’. If the rally had instead impaled the resistance or gapped through it on first contact, it would have implied beyond doubt that prices were headed to the pattern’s $5.33 target. That would be an all-time high and in theory indicative of strong global demand for copper. Could that possibly be right? No, it could not; far more likely is that it would reflect a blowoff in purely speculative demand for tangible assets. No boom in manufacturing is coming because making things is no longer the ticket to wealth. The big money lies in ‘doing deals’ with grotesquely inflated paper assets, and in advertising widgets, as Google and Facebook do, rather than producing them. If you want to know where the financial system is headed, and how quickly it could get there, keep your eye on the $3.63 pivot price in Comex copper.
Interesting times, for sure, but apparently not quite interesting enough to dampen the ardor of wildly exuberant buyers on Wall Street. With patriots storming the doors of the Capitol and a reported shooting inside the building, the Dow Industrials still managed to finish the day with an immoderate gain of 438 points. Do the institutional chimpanzees who were doing most of the buying know something we don’t? More likely is that, because they get their news from MSNBC and the networks, they were ignorant of certain developments that could profoundly unsettle America. Read all three parts of this remarkable exposé to understand just how serious the crisis could become. If you’ve been puzzled by Vice President Pence’s bizarre willingness to certify an election that he surely knows employed massive fraud to turn him and his boss out of office, the linked story provides a compelling motive. In the meantime, don’t expect the patriots to go home any time soon. They blocked the certification of electoral results as intended, and they can probably do it again as long as they remain peacefully within the bounds of the First Amendment. Not surprisingly, the extent of the violence is being exaggerated to a brazen extreme by a news media that saw the torching of Portland as ‘mostly peaceful’. For his part, Trump was so forthright in telling them all to go home that the news media will have difficulty convincing even the most ignorant viewers that he incited violence. If you want to better understand what is going on and what is about to unfold, listen to the news with a skeptical ear. They have been wrong about everything so far, and they will be just as wrong underestimating the extent to which the world-shaking events of the next few weeks were planned by the good guys.
To all of my subscribers and readers, warm holiday greeting and best wishes for a happy, healthy and prosperous new year. It begins with many troubling issues unresolved, most particularly the question of who will be the next U.S. president. Various vaccines promise to ease the pandemic, but possibly not in time to prevent many small businesses from failing. A bright spot, particularly in states like California, New York and Michigan, where dictatorial governors have disregarded individual rights, is that business owners are at the point of revolt. This bodes well for America, since our political leaders are obviously in need of rebuke and a reminder of whom they would serve.