Posted at 9:35 AM (CST) by & filed under Jim's Mailbox.

I asked Tony earlier today if he was going to stand by his mailbox waiting for a check?

Bill

Oh, the answer to your question as to what the $1000 Easter egg will buy is (drum roll please)……….nothing!
There’s no place open to spend it and the few that are open are out of goods!!!
What a shit show!

CIGA Tony

Jim/Bill,

Never trust what government stats tell you.

However, pay close attention to the long end of the bond market.

It speaks volumes.

Jeff Gundlach predicted during his DoubleLine call yesterday that the U.S. national debt likely to grow to $30 trillion in two or three years as spending explodes in response to the crisis, which means about $3-4 trillion in net issuance per year, and that upcoming supply tsunami is certainly sending bond prices lower, potentially dealing a deathly blow to the risk-parity/balanced “60/40” portfolio model.

Perhaps, over the last 2 days, it (bond market) is sensing impending inflation of a magnitude greater than we can imagine.

CIGA Wolfgang Rech

We told you about this on our recent subscriber call. It is game over once rates rise against the Fed’s wishes.

Bill

There Is Something About This Crazy Treasury Move That Nobody Can Explain
March 18, 2020

On one hand, the recent surge in 10Y yields is precisely what one – and certainly we – would expect: after all, the official arrival of helicopter money in the form of $1,000 checks to most Americans means that people’s expectations for government generosity repriced overnight, and now the political debate shifts to how much more free cash Americans should expect and for how long (with Bernie Sanders firing the first shot with a proposal to hand out $2,000 instead of $1,000). On this point, Jeff Gundlach predicted during his DoubleLine call yesterday that “the U.S. national debt likely to grow to $30 trillion in two or three years as spending explodes in response to the crisis”, which means about $3-4 trillion in net issuance per year, and that upcoming supply tsunami is certainly sending bond prices lower, potentially dealing a deathly blow to the risk-parity/balanced “60/40” portfolio model.

Yet on the other hand, Treasury inflation breakevens have plunged to record lows as if the market is saying that despite this flood of new money, there will be no actual inflation as much as a decade in the future. To put it mildly, this is bizarre, and as BMO’s Ian Lyngen writes this morning, “there are aspects of the overnight price action which resonate and others that confound. Mnuchin’s dire warning that the unemployment rate could spike to 20% in the absence of government intervention to address the coronacrisis had the foreseeable impact on the equity market; limit down. The shape of the yield curve has also performed in line with prior easing episodes with 2s/10s reaching 72.6 bp overnight and offering solace to those anticipating a cyclical resteepening.”

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Jim/Bill,

What good is a Payroll Tax Holiday, raising your take home pay, if you are no longer employed?

Businesses shutting down everywhere.

Political stunt?

CIGA Wolfgang Rech

Good point Wolfgang.

Bill

President Trump’s Payroll Tax Holiday: Budgetary, Distributional, and Economic Effects
March 12, 2020

· In response to the economic effects of the coronavirus, President Trump has proposed a payroll tax holiday that would temporarily eliminate all Social Security and Medicare payroll taxes through December 31st, 2020. PWBM projects that this payroll tax holiday would cost $807 billion if the holiday were run from April 1 through December 31, 2020.

· Households in the bottom 20 percent of the income distribution—those households with the highest willingness to spend their tax savings—would receive about 2 percent of the total tax cut and only a third of these households would see any tax savings due to low levels of taxable income. Tax savings would also accumulate slowly over time relative to direct government spending.

· PWBM estimates that eliminating payroll taxes would have little net impact on the economy in the short run and would reduce the size of the economy by 0.1 percent in 2030 and 0.2 percent in 2050 due to additional debt.

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Jim/Bill,

Slowly but surely the hints of coming Hyperinflation are coming to press!

The world, in particular the general public, should know.  Shout it from the rooftops.

CIGA Wolfgang Rech

Believe me Wolfgang we have tried, but people always laughed at us.  THIS is no laughing matter…

Bill

Bernanke and Yellen Tell the Fed to Monetize Everything.
March 18, 2020

Thus far in this crisis, the Fed has:

1)    Cut interest rates from 1.25% to 0.15%.

2)    Launched over $700 billion in Quantitative Easing (QE).

3)    Launched a $1.5 TRILLION repo program.

4)    Launched another $1 trillion repo program.

5)    Announced it will begin buying commercial paper (short-term corporate debt).

6)    Allowed primary dealers to start parking assets, including stocks, as collateral in exchange for short-term credit.

7)    Opened Euro-Dollar swaps (this implies systemically important banks in Europe are in danger of collapse).

Under any set of circumstances, the above set of policies would be considered the NUCLEAR option. The fact that the Fed has launched ALL of these in the span of three weeks is beyond incredible.

In the simplest of terms, the Fed has effectively used up ALL of its ammo in less than a single month. At this point, there truly is not much else the Fed can do.

And the markets continue to implode. As I write this, the futures markets are once again LIMIT down, meaning they had to be frozen after falling 5%.

More…

Posted at 9:27 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

Ashes to ashes, dust to dust. Do you understand?

Fed Launches Primary Dealer Credit Facility Which Will Accept Stocks As Collateral
March 17, 2020

Earlier today, when discussing the launch of the “Lehman crisis playbook” in response to the Global Covid Crisis, we listed the alphabet soup of measures the Fed may launch which are a replica of the measures adopted in the aftermath of the Lehman collapse. These included the AMFL, the MMIFF, the TAF and last but not least, the PDCF, or Primary Dealer Credit Facility, which as Rabobank said “would provide overnight funding to primary dealers, similar to the way the discount window provides a backup source of funding for depository institutions.”

Just three hours later, at 6pm ET, the Fed, as expected, announced the establishment of a Primary Dealer Credit Facility (PDCF) “to support the credit needs of households and businesses.” What the Fed really meant is that it is now launching a way for dealers to monetize the stocks they own, as the facility will be collateralized, among others, by “equity securities.”

As the Fed announced, the PDCF “will offer overnight and term funding with maturities up to 90 days and will be available on March 20, 2020” and will be in place for at least six months and may be extended as conditions warrant.

But here is the punchline:

Credit extended to primary dealers under this facility may be collateralized by a broad range of investment grade debt securities, including commercial paper and municipal bonds, and a broad range of equity securities.

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Bill Holter’s Commentary

COMEX prices are irrelevant.

MASSIVE SURGE IN PHYSICAL SILVER BUYING: Totally Distorted & Broken Markets
March 14, 2020

The world economic and financial markets have entered into a crippling cannibalization of the system in which few are prepared.  While the politicians, financial analysts, and media are providing optimistic forecasts for the future, they continue to underestimate the seriousness of the global contagion.  Thus, after a week or two, these forecasts will be revised lower (once again) to reflect a more gloomy, negative and more realistic outlook.

So, in another a few weeks, the world as it pertains to this contagion will look a lot worse than it does today.  I’d imagine the Dow Jones Index will likely shed another 5-8,000+ points during this period. Also, the global supply chain disruptions will kick into high gear as month-long lockdowns in various countries finally impact manufacturers and retailers across the world.

I haven’t put out too many new updates and articles over the past few weeks.  Rather, I decided to take a step back to research and watch as this global contagion continued to unfold.  However, I will be putting out more updates, videos, and articles over the next month as I believe most people are still unprepared for what’s coming.

Although, I have been a bit busy on Twitter recently.  You can follow my TWEETS and REPLIES on Twitter here: SRSRocco Report Twitter Feed.  When I posted this Tweet on March 15th, the price of oil was $31.  I stated that the price would likely fall to $29 the next day… and it did. The relevant sentence in the tweet below is… WE DON’T COME BACK FROM THIS ONE.

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Posted at 9:25 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

But the real question is, what will this “free” $1,000 purchase when it comes to real goods?

White House Unveils $850 Billion Economic Rescue Package, “Sending Checks To Every Household” A Good Idea, Dudley Says

March 17, 2020

Update (0830ET): Former NY Fed President Bill Dudley appeared on Bloomberg TV Tuesday morning to say that if the administration really wants to restore confidence, it should reconsider its insistence on a payroll tax holiday, and instead start firing off checks to every US household.

“I think one good idea is to actually send out checks to households” to provide support during the coronavirus outbreak, Dudley said, who added that while the Fed is doing “everything it can” to support the availability of credit, the central bank is virtually powerless to blunt the initial demand shock: Only fiscal stimulus can accomplish that.

“If that situation continues to deteriorate then I think we’ll start to see the kind of special emergency interventions that we saw in 2008.”

His comments come amid rumors that the Fed is about to intervene in the Commercial Paper market.

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Posted at 9:17 AM (CST) by & filed under General Editorial.

Great and Wonderful Happy St. Patty’s Day Folks,

     Golds value remains inside yesterday’s trading range with the price at $1,470.80 down $15.70 after dipping to $1,465.60 with the ICE rally high at $1,519.30. Silver is still leading the declines with the trade at $12.150, down 66.10 cents and at its low of $12.11 with the ICE high to beat at $13.230. The new quarter’s US Dollar trade (June) now has a value of 99.205, up 105.3 points after reaching up to 99.395 with the low at 98.105. Of course all this happened already, before 5am pst, the Comex open, the London close, after the G7 threatened the world that it will survive even without human participation, after Nasdaq, Dow, S&P Futures surged limit-up but not locked, after fast food restaurants close their dining areas and playgrounds (rats!), and after the slow minded are told not to call 911 because they can’t find toilet paper. You will survive, Cowboy Up and just use a corn cobb.

      In Venezuela, Gold’s value now sits at 14,689.62 Bolivar, showing a gain of 70.92 with Silver at 121.348 Bolivar, it too gaining 1.248. Argentina’s currency now has Gold’s value priced at 92,615.78 Peso’s proving a gain 680.86 overnight with Silver gaining 9.591 A-Peso’s priced at 765.064. In Turkey, the Lira has Gold’s value pegged at 9,552.16 showing a gain of 187.31 with Silver’s price at 78.9041 proving a gain of 1.9642 in T-Lira value. All this is definitely a good sign to see, but we need to get past Thursday’s Tripling Witches.

       March Silver’s Delivery Demands now sit at 375 fully paid for contracts waiting for receipts, showing a drop in count of 285 contracts that either got receipts, entry/exited a spread, or were sent to London so they can be dumped here again (or?), after yesterday’s trading range swung between $14.885 and $11.885 with the closing price at $12.772 and after the Volume reached 103 before the close. So far this morning Mr. Resolute has yet to appear, in fact there are no trades posted at all. Maybe he too is waiting for the Tripling Witches attempt to force the prices lower to prove how good they are at casting a bearish spell using paper instead of a wand. The IMF is at the ready, and if they are to continue on, we could see Silver for free by the end of the week. Silver’s Overall Open Interest continues to collapse as the prices keep dropping with the old school view; if Prices and Open Interest drop together, the Longs are exiting. I’ll continue to leave room for that belief (barely), at the same time, imo this market is run by Algo’s not traders. The Algo’s number one job is to remove the old ideas (emotions) with their micro-second trading rhetoric to prove how wrong a trader’s emotional responses are. The Open Interest now sits at 168,978 Overnighters proving another 3,681 contracts (or spreads) exited the trade. 

      March Gold’s Physical Demand Count now sits at 64 fully paid for contracts, proving a gain of 13 with yesterday’s trading range between $1,569.10 and $1,452.10 with the adjusted closing price at $1,485.90 and with a total Volume of 192. So far this morning we have a Volume of 2 up on the board with a trading range between $1,471.40 and $1,469.30 with the last Buy/Sell at the high. Gold’s Overall Open Interest is also collapsing as yesterday’s activity will prove a drop in count of 12,552 Obligations leaving today’s starting total at 573,337 Overnighters.

      The idea of Algo’s trading instead of people has been discussed many times already, but not in depth as to how they can control the direction behind a mask. Once again, I do not know if this is a certainty because I do not have the Algo data like certain individuals inside an element have, or our regulators, it is only a running thesis. If a certain element was in a spread trade, say to the tune of 100,000 positions, it would be easy to manipulate the price against the emotions of human trading. Let’s look at Silver for instance, and in between the Life of Contract High in Paper at 246,078 that occurred on March’s Option Expiration Day (Feb 25th) to now at 168,978. If one was to key the Algo (and its friends) to drop the prices hard, all the algo would have to do is sell all their longs in the spread and all at once, causing a hard drop in price overtaking any buying and changing the dynamics from positive to negative. Then the same algo system would be instructed to buy back their sold positions slowly, in order to re-enter the spread throughout the day, as those that were on the wrong side are forced out with a loss.

      At the same time the algo is buying back into their long positions (re-entering) of the spread trade, the Short side (of the spread) would be buying back and lightening up the spread count which in turn winds up masking the drop in Open Interest. Like we are seeing in Silver’s Paper Count which lost 77,100 pieces of controlling paper these past 15 trading days. The algos all signal one another, which has removed the text messages and barroom discussions many were caught doing before the algos setup their signals.

      We still believe in Silver and Gold, they will be used to reboot the system, all it takes is surviving the BS till the reboot. So, hang in there, keep the attitudes positive, keep a smile on your face (behind the mask), and as always …

Stay Strong!

Jeremiah Johnson

JeremiahJohnson@cableone.net

More J.Johnson content is available with purchase of a JSMineset subscription.

Posted at 9:02 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

Really?  I think one must ask “why”?
Bill Gates Resigns From Microsoft Board
March 13, 2020
One hour after the close of another one of the most tumultuous weeks in Wall Street history, Bill Gates, the billionaire founder of Microsoft, resigned from the company’s board.
Earlier today, Gates stepped down from the board of Berkshire Hathaway, the conglomerate run by his friend and fellow billionaire, Warren Buffett. Both men have been in the press a lot lately amid the market turmoil (Buffett) and viral panic (Gates).
Gates, who gave up the chairman role in 2014 and hasn’t been the active leader of the company since 2008, stepped down from the board to dedicate more time to his philanthropic priorities.
He will continue to serve as Technology Advisor to CEO Satya Nadella and other Microsoft leaders.

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Posted at 11:41 AM (CST) by & filed under In The News.

Bill Holter’s Commentary

The new millennium’s safe haven! We refer to it as digital air…

Please notice the timestamps below?

Untitled

Bill Holter’s Commentary

Well done Erik, if only one person reads and listens to this, you served your fellow man and lived a worthy life!

The Hope-Full-Less-Ness of the United States Economy_001

The Hope-Full-Less-Ness of the United States Economy_002