The truth is starting to come out, and a lot of people aren’t going to like it. When the supply chain problems and the shortages began, government officials repeatedly assured us that they would just be temporary, and most of us believed them. But now it has become clear that they aren’t going to be temporary at all. In fact, during a recent interview with Bloomberg, U.S. Transportation Secretary Pete Buttigieg admitted that some of the supply chain problems that we are currently facing could last for “years and years”. I don’t know about you, but to me “years and years” sounds like a really long time.
Of course that is not the only time that Buttigieg has made such a claim. During another recent interview, he used the words “long term” to describe what we are facing…
Buttigieg has said in recent interviews that “it’s an incredibly complicated situation,” but the government is holding virtual “roundtables” with port operators, labor unions and private companies. Nevertheless, he told MSNBC last Thursday, the “challenges” will continue, not only “going into the next year or two, but going into the long term.”
Isn’t it remarkable how the outlook for our economic future has changed so dramatically in just a matter of a few months?
Earlier this year, we were told that we would soon be entering a new golden era of prosperity.
But now inflation and shortages are causing chaos everywhere we look.
Earlier today, I came across a Daily Mail article that boldly declared that “stores across America have empty shelves” right now…
Stores across America have empty shelves thanks to a series in supply chain problems that are prolonging inflation and could stretch into the new year, with some retailers like Costco and Walmart limiting the amount of toilet paper in some stores.
More than 60 cargo ships are waiting to dock in California, carrying hundreds of thousands of containers, and may be stuck for months in a traffic jam after arriving from China and Asia. Millions of dollars of American goods are still sitting in warehouses in China, awaiting shipment.
In addition to the unprecedented backlogs that we are witnessing at our major ports, it has also become far, far more expensive to send products across the Pacific Ocean.
Just check out these numbers…
The Washington Post reported the median cost of shipping a standard container from China to the U.S. West Coast hit a record $20,586. That’s nearly twice what it cost in July, which was twice what it cost in January, according to the Freightos index.
“Consumers are confronting higher prices and shortages of cars, children’s shoes and exercise gear, as the holiday shopping season looms,” the Post said.
That is crazy.
And now the emerging global energy crisis is going to make it even more expensive to move stuff around the planet. On Monday, the price of gasoline in the United States hit a new seven-year high…
The national average price for gasoline hit a fresh seven-year high of $3.27 a gallon on Monday, up by 7 cents in the past week alone, according to AAA. Gas has nearly doubled since bottoming at $1.77 in April 2020.
High gas prices will only exacerbate elevated inflation, squeeze the budgets of American families and hurt President Joe Biden’s political fortunes.
In addition, we just learned that U.S. stockpiles of heating oil have hit a 20 year low…
The U.S. may be heading into winter with the lowest stockpiles of heating oil to meet surging demand in more than two decades.
Inventories of distillates — used as diesel for both transportation and heating oil — are enough to meet 31.2 days of demand, according to the Energy Information Administration. That’s the tightest it has been for this time of the year since 2000.
Unfortunately, global energy supplies are going to get even tighter and prices are going to go even higher in the months ahead.
Needless to say, the big corporations are going to feel forced to pass on rising costs to consumers. In fact, the head of Kraft Heinz says that his company is already doing this…
Miguel Patricio said the international food giant, which makes tomato sauce and baked beans, was putting up prices in several countries.
Unlike in previous years, he said, inflation was “across the board”.
The cost of ingredients such as cereals and oils has pushed global food prices to a 10-year high, according to the UN Food and Agriculture Organisation.
If you are reading this article and you are thinking that this is perfectly setting the stage for many of the scenarios that I have described in my books, you would be 100 percent correct.
We are entering a period of inflation that is going to absolutely shock most people.
In fact, the UN says that the global price of food has already risen more than 32 percent over the past year…
The United Nation’s Food and Agriculture Organization (FAO)’s September food price index – a measure of monthly changes in global food prices – reached 130 points, a level not seen since 2011.
It represents a 32.8 percent increase from September 2020.
I realize that I have thrown a lot of information at you very quickly in this article.
Things are starting to move quite rapidly now, and we are being warned that conditions are going to continue to deteriorate in the months ahead.
And as conditions deteriorate, the American people are going to becoming increasingly restless. Already, polls are showing that Americans are quite dissatisfied with the current state of affairs. Here is one example…
Just 37% of Americans rate the economy as very or fairly good – the lowest percentage since March, and for the second straight month, more than half feel the economy is in bad shape. And most Americans are not convinced that the Biden administration’s domestic agenda would improve the economy.
As I discussed yesterday, our economy is starting to break down on a very basic level.
We have become so dependent on an efficient flow of goods and services, but these days there are breakdowns all over the system.
I would like to tell you that things will get better soon, but I can’t do that.
More supply chain problems are ahead, and some of them are going to be exceptionally painful.
* * *
Canadian Residential Real Estate Prices Growing the Fastest In the G7
Saying Canadian home prices are frothy, is like saying Mozart had a little musical talent. Residential real estate prices in Canada are growing at the…
Saying Canadian home prices are frothy, is like saying Mozart had a little musical talent…Residential real estate prices in Canada are growing at the fastest rates in the G7 and not just over the past year, but over the past 3 decades, Nothing in the G7 comes even close to this rate of price growth….
- Real home prices were up 6.89% in Q2 2021 and are now 25.60% higher than the same quarter a year before. Both the quarterly and annual increases are the largest in the G7 by a wide margin. In fact, annual growth hasn’t been this high in…over three decades.
- Canada’s 25.6% real annual growth in Q2 2021 towers over the paltry 9.13% peak growth the U.S. saw in 2005. One needs to go all the way back to Q4 1989 to see anything like this in the G7, when Italy squeezed out a larger gain.
- Only five quarters in the past 46 years have printed larger annual price growth in real terms across the G7. Outside of Canada, not one of those gains has been seen after 1990. Monetary systems aren’t supposed to be this poorly managed with all of the new policy tools since the 90s. It takes an extra special effort to screw up this royally.
U.S. Home Prices Are Growing Fast, But It’s Still A Fraction Of Canada’s Rate
U.S. home prices are also making headlines for rapid price growth, but it looks tame in comparison.
- Real home prices in the U.S. increased 3.45% in Q2 2021, and are 7.75% higher than the same quarter a year before. Even with these lofty gains at nearly the size of peak bubble growth, they’re only a third the size of Canada.
Global Real Estate Prices Are Surging, But Not Like In Canada
Global real estate prices might be surging, but no advanced economy is seeing what Canada is.
- The average quarterly growth for the G7, excluding Canada, was a 1.25% real increase. This is just under a fifth of the size of Canadian home price grew over the same period. The U.S. and Germany are the next closest countries, with growth at half and a third of the rate, respectively.
Canadian Home Prices Are Growing 4x The Rate Of The Next G7 Country
Canadian real home price growth on an annual basis is also lofty for the G7.
- Average annual growth for the G7, excluding Canada, was 5.48% in Q2 2021, just under a quarter the size of Canada.
- The U.K. is in a distant second with 9.22% growth,
- and Germany’s home prices are 8.55% higher…
G7 Real Annual Home Price Growth
The inflation-adjusted annual price increase for home prices in G7 countries in Q2 2021 were as follows:
Canadian Home Prices Have Increased 139% Since 2005, 3x More Than The Next G7 Country
…Since 2005, real home prices in Canada are up 139% as of Q2 2021, and that’s at the national level. Cities like Toronto and Vancouver have seen even larger growth over this period. Smaller secondary markets around these cities have grown even faster.
- Since 2005, Germany’s real home prices are the second-fastest in the G7 growing at 46.65% in Q2 2021. That’s about a third of the growth seen in Canada over the same period but was enough for residents of the country’s capital to vote for nationalizing the rental stock.
- The U.S., even including the current price boom, has only increased 10.49% over the period. One would think alarms would go off with home prices growing at 13x the rate of the country’s closest trading partner. Nope, Canada’s central bank actually said they “need” the growth.
Canadian real estate is now showing a few signs of cooling, fewer sales and falling investments are two of the big ones…[but] not even a correction can fix affordability in markets like Toronto and Vancouver at this point. Add to that, Canada’s largest bank warned tightening credit should contain further growth. Buyers are now facing the opposite conditions seen at the beginning of the pandemic.
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Could This Be A Blow-Off Top For Tyranny?
Could This Be A Blow-Off Top For Tyranny?
Submitted by Mark Jeftovic, Co-founder & CEO, easyDNS Technologies ,
Could This be a Blow-Off…
Submitted by Mark Jeftovic, Co-founder & CEO, easyDNS Technologies ,
Could This be a Blow-Off Top for Tyranny?
King John’s military failure at the Battle of Bouvines triggered the barons’ revolt, but the roots of their discontent lay much deeper. King John ruled England in a ruthless manner at a time when the instruments of government and the practices of the courts were becoming consolidated. Eventually the barons could no longer abide the unpredictable ruling style of their kings. Their discontent came to a head during John’s reign.
There was a lot of defeatism evident in the comments on my recent series of posts, Why the West can’t ban Bitcoin, How we know Bitcoin is a force for good and No-Coiners don’t get that it’s not up to the government. The overall timbre being that governments are all-powerful and that they will simply ban or outlaw emergent phenomenon that doesn’t suit their purposes.
For awhile this was also my concern. When I wrote Domestic Terror is a Government Without Constraints it was motivated from a place of angst and hopelessness. However as we’ve all been watching events unfold, my mindset around this has been shifting. I have been coming across instance after instance of historical accounts on how seemingly unassailable and despotic regimes were swept away in mere moments of time, when it was least expected, when they seemed to be at the height of their power and poised to consolidate it even more.
It is in these inflection points where nobody is aware of their existence, a grain of sand shifts somewhere and suddenly a geopolitical Minsky Moment ensues. Then it’s all over:
The fall of the 300-year old Romanov dynasty and 800 year line of Tsars in a weekend over 1917 a few months after an obscure prince named Felix Yusopov murdered a peasant scoundrel named Rasputin
The collapse of the Soviet Eastern Bloc in 1989 after gateway between Austria and Hungary was opened one weekend during a Pan-European picnic. It led to the collapse of the USSR after a failed hardliner coup in 1991.
In 1945, the government of Haiti was overthrown in an uprising three days after the French writer and revolutionary Andre Breton gave a speech on Surrealism in Port-Au-Prince.
Back in the days of William Buckler’s The Privateer newsletter, there was another, lesser known but just good newsletter by Mark Rostenko called The Sovereign Strategist (I have to admit modelling The Crypto Capitalist on both). Rostenko once wrote: “Nothing is bigger than the market. Nothing.”
Rostenko quit in disgust and moved to the wilderness, I had brief communications with him over the years including this interview on my old blog. But my last couple emails to him have gone unanswered.
What Rostenko may have lost faith in, for the moment, was that “the market” is really another word for The People. Every individual should be free to conduct their daily affairs in a way that serves their rational self-interest. I can hear the collectivists shrieking at that statement. To them I would simply dismiss their claims on everyone else’s autonomy by saying that when particular self-interested behaviours begin to adversely impact on the commons of everybody, then in an undistorted, free market we would see it in rising costs or other market signals that would change the incentive structure and with it, everybody’s behaviours would adjust.
Example: in a truly catastrophic global pandemic with a Black Plague, Ebola or Spanish Flu level of lethality, nobody would have be compelled to wear a mask, stay off the streets or queue up for a vaccine.
In my piece that government can’t ban crypto, the naysayers converged around two objections:
FDR’s gold ban of 1932 and
CommunistCentralist China now.
FDR’s Gold Ban of 1933
This is one of those episodes in history where people simply don’t look beyond the headline. All they know that is in 1933 a series of executive orders were passed to remove the ability to hold gold privately or specify it as a payment method in contracts and they assume that was it: in a puff of edict, all privately held gold simply disappeared from the public’s hands (“checkmate, Bitcoin cultist”).
But that isn’t what happened.
In Kenneth R. Ferguson’s “Confiscation: Gold as Contraband 1933-1975” we get a more nuanced look at what the effect and implications of the gold ban were, including the haunting parallels to today’s Lockdown Society and it’s war on small business and the middle class.
Our lack of insight into this era…
“gives short change to the legitimate concerns of the people who were most opposed to President Roosevelt’s gold policies—farmers, blue collar workers, small business proprietors—and who believed democracy had been circumvented. Just a few years earlier, in the late 1920s, the mere thought of gold confiscation would have been inconceivable to everyone, including those who later supported it.”
The gold ban came after FDR and the Democrats ran a campaign premised on a balanced budget and reduced government spending (yes, really). By the time he came into office the Great Depression was in full swing, the S&P had come off 80% from its 1929 high, unemployment was at 25%. England was forced to abandon its gold standard in 1931 and 25 other countries followed suit within the year.
The newly elected president came into office facing a wave of bank runs and took over the entire financial sector on his second day in office, “emergency executive control over all banking and currency transactions.”
FDR blamed gold hoarding for the nation’s banking crisis, however:
He failed to explain hoarding as a way of protecting a life savings in the face of frequent and increasing bank insolvency coupled with no depositor insurance, or to identify speculative activity abroad as foreigners exchanging their dollar assets for gold in anticipation of dollar devaluation. Most people would understand these choices as rational, but Roosevelt labeled them “unwarranted” and “speculative” in an emotional appeal to wrongdoing.
The emphasis is added, because it highlights our main assertion: at some point rational self-interest creates an environment that incentivizes certain behaviours in spite of those that the government is attempting to induce. In fact, the harder the government may try to impose behaviours that are against the rabble’s own interests, the more vigorously they may adapt the discouraged behaviour (also see: Bitcoin).
FDR’s administration escalated the war on savers by ratcheting up the restrictions against gold:
“The gold policies of President Roosevelt over a ten-month period provided a classic example of a political slippery slope. On April 5, the President declared “hoarding” to be illegal, and on August 28 the crime was elevated to “holding.” On December 28, 1933, the Secretary of the Treasury finalized the mandate by “requiring the delivery of gold coin, gold bullion, and gold certificates to the Treasurer of the United States” (that is, from the theoretically-temporary hands of the banks into the more permanent possession of the government itself.) This is the definition of confiscation; it merely took ten months to be so stated.”
Ferguson’s book does a masterful job detailing the machinations of this chapter in US and economic history, in details far exceeding my available bandwidth here.
So what actually did happen?
Compliance turned out to be low: it was estimated that $287 million USD of gold was in the public hands at the time of the ban. This excludes gold already exported out of the country by those who saw it coming (Canada was a favourite destination and waypoint) and the wealthy who were speculating against a USD currency devaluation using gold held offshore.
Of that remaining stash in US public hands, compliance was estimated to be less than 50% by some tallies. The total face value of all gold coinage surrendered between 1933 and 1965 was less than $12 million USD, or approximately 4% of outstanding gold coinage.
China’s Bitcoin Ban
From my latest Crypto Capitalist letter, I cover the general situation in China:
China’s crypto ban is actually less about crypto and more about state control over everything. There are rumours that China will soon break up Alipay, the overarching pattern is that China perceives Big Tech and decentralized tech as threats to the CCP hegemony, and they are moving to crush all opposition.
Only by moving to outlaw entire industries, especially the ones poised to inherit the future, China may be repeating the same error that made over 500 years ago, when they ceded passage over the open seas to Europe, who went on to shape the trajectory of the world while China atrophied into centuries of internal strife and conflict:
“More than five centuries ago, three ancient civilizations made three crucial decisions that largely preordained their subsequent collapse. As always, during periods of stress, these choices were not perceived as either critical or damaging. Indeed on the contrary, they were viewed positively as constructive responses to the contemporary problems that helped to strengthen their respective societies. In a matter of several decades between 1433 and 1485, China, Russia and the Ottomans independently decided that interactions with foreigners, trade, innovation, civil and property rights, education, and freedom to exchange views were contrary to the interests of the state and social cohesion”
— Victor Shvets, The Great Rupture
Is China making the same mistake now?
We can already see that an outright ban on Bitcoin and crypto-currencies in China has had no effect on them globally. Zero. Think about that.
Also note that reminiscent of how gold was exported from the US ahead of the gold ban in 1932 (not because anybody saw the ban coming per se, but because a devaluation of the USD was seen as likely), the largest Chinese crypto exchanges have been exiting China since 2017. Binance is still operating full-tilt having moved their HQ from Hong Kong to Bahamas, which is quite literally a page from The Sovereign Individual playbook – moving from a jurisdiction hostile to your interests to one accommodating to them.
Binance has its own exchange token (BNB) which at a $64B market cap makes it the 5th largest crypto currency in the world, and a Layer 1 blockchain (Binance Smartchain) that currently has a little under $20B TVL in DeFi, which definitely puts it somewhere on the Network State / Crypto-clave spectrum.
Something similar happened with Chinese miners, who are moving to the West or other Asian jurisdictions.
Interestingly, most of the crypto entities that arose there and then fled, came up in Hong Kong, which has had a taste of free market capitalism until the big rug pull in that respect in recent years.
In mainland China itself, they’ve always been living under totalitarianism and the population is inculcated to it. But even there, how long can the Chinese people, catching glimpses through the Great Firewall of
far more marginally freer people, especially those in Hong Kong, abide by tyranny? How long can that centralized, top-down repression truly continue for?
Life in liberal democracies is traditionally supposed to be anything goes except that which is expressly illegal. But we’ve had two years of rule by edict and that which is not explicitly permitted is forbidden.
How long can this continue for?
On a local level, some restaurants in Toronto are deciding not to enforce vax mandates. The longer the mandates continue, I expect more restaurants to begin eschewing them, because their economic self-interest is served by doing so. Even fully vaxxed people are curbing their outings because dinner and a movie feels more like internment into a gulag than a family night out.
Venues that help people regain that sense of normalcy and comfort will attract the business, not the ones who force you to show “your papers please” on the way in.
In Australia, the peasants are revolting, and even if the civil aviation authority is trying to ban drones from capturing the footage of these occurrences, they are still occurring and footage is getting out nonetheless.
Varying US states ruling against vaccine and mask mandates, people are setting up job boards for those who aren’t vaxxed (or those who are but don’t want to work for companies that require it). The transportation system is grinding to a halt as air traffic controllers, air crew and pilots are calling in sick, resulting in mass flight cancelations, who knows where it will spread next. Why? The MSM is trying hard not to find out, but guys like Ron Paul suspect vaccine mandates.
Right now we’re in civil disobedience, nullification and secessionist territory, but when I think about escalation: as the financial crisis that seemed imminent before COVID seems to be edging back into the frame (inflation, energy costs, supply chain constraints, cascading debt collapses: Evergrande and now the entire Chinese bond market) governments who seized on the COVID opportunity to introduce emergency measures may see a need for doubling down.
After chasing the goalposts for almost two years now, I’m not sure the rabble is going to take it much longer. And if it doesn’t, what would that mean?
In a recent podcast I was listening to (I think it was Sahill Bloom on Bankless, but it’s possible I’m misremembering and I’m sorry if so), he said something almost off-handedly:
He said, in effect, “the next world war will be unlike anything we’ve ever seen” – and I expected him to talk about non-conventional warfare, such as bio-weapons, information warfare, and economics (“war by other means”), but instead he said
“World War III will be everybody against their own governments”
When you think about it, one realizes that today’s technology, with decentralization, cryptography, 3-D printing and drones could actually make this a possibility.
In David Hambling’s Swarm Troopers: How Small Drones Can Conquer the World, he outlines how governments, whose military used to have technologies 20 years ahead of the general populace, have become so bureaucratized and sclerotic that they now move at a fraction of the pace of the highly competitive private sector:
“If a commercial product goes through a generation every two years and the military cycle takes six years per generation, then in twelve years the military product goes from being four times as powerful as the competition to a quarter as powerful.”
An example of this dynamic we can already see having played out is the Internet, which came out of the military industrial complex and in its day, was light-years ahead of anything the general public had (Compuserve, GEnie).
But the “genie” did indeed get out of the bottle, and once the private sector got onto it and ran with it, it changed the fundamental architecture of power. The groundwork was laid for the evolution of societies in ways that would challenge, and will inevitably overwhelm the nation states that let it out. Say hello to the Network State and crypto claves.
So now that we’re here in The Jackpot, do we honestly believe that the slowest, most bureaucratic, rigid an inflexible entities (governments) are actually going to win the race for primacy in a rapidly decentralizing world? When the gargantuan imbalances they created over the last century finally experience their all-encompassing, self-induced Global Minsky Moment?
It was under FDR’s gold ban that dissenting Supreme Court Justice McReynolds ruminated that it meant the demise of the US Constitution:
It is impossible to fully estimate the result of what has been done. The Constitution as many of us have understood it, the instrument that has meant so much to us, is gone. The guarantees heretofore supposed to protect against arbitrary action
have been swept away. The powers of Congress have been so enlarged that now no man can tell their limitations.
Guarantees heretofore supposed to prevent arbitrary action are in the discard… Shame and humiliation are upon us now.
Moral and financial chaos may confidently be expected.
While in those days the ban on gold was ineffective and compliance less than half, it did succeed in stripping the US citizenry of constitutional protections which has only escalated into the present day.
We have all been treating what happened under COVID as something unprecedented. But if you think of Lockdown Society and The New Normal not as the implementation of a quasi-one-world government , ushering in a global police state, but instead as the crescendo, of a roughly century long process of creeping tyranny…. one of those infamous blow-off tops that are unrecognizable to us now because we are immersed in it, still experiencing it.
Despite the overwhelming arsenals of governments, the militarization of civilian police forces, and near ubiquitous surveillance capabilities, there’s never been a time in history when the people have the means to rebel, both within the system and without.
Especially here in North America, where to avoid retyping all this, allow me to simply excerpt a passage from the most recent edition of The Crypto Capitalist letter….
“The Future of Life Institute made docudrama short-film called “Slaughterbots”, it’s 7 minutes long and nothing short of chilling, but we’d be fools to think that if technology has this capability already, it won’t be used. By somebody:
It’s still under-appreciated how significant a change this is. On par with the gunpowder revolution and aerial warfare, autonomous weapons and drones are yet another technology in the process of changing the rules of the game. This brings us to the important part: we can already see that these technologies won’t just change the nature of conflict between governments. Drones are also accessible to non-state actors, perhaps even more-so. They will alter the relationship of power across society as a whole.
When also you factor in their close cousin, 3-D printed weapons, we really begin to understand what a fundamental shift in the landscape decentralization and digital technology really implies.
One of the defining characteristics that makes America, and certain other countries so different from, say, China, or even Australia, is the level to which the citizenry is armed. Especially in North America. The US and Mexico are two of the only three countries in world where gun ownership is a Constitutional right (the third is Guatemala) while even here in Canada, where it isn’t, we have one of the higher per-capita levels of gun ownership (somewhere around 34 guns per 100 people).
Imagine a future in which all these gun owners have the capability and incentives to print up their own weapons on 3- D printers. Then deploying them via drones, possibly swarms of them, for whatever purpose. There is no technological barrier from them doing so, and doing so right now. What scenarios or conditions would have to exist to galvanize that kind of behaviour en masse? How close are we to those conditions now? Are we moving toward those conditions or away from them? Most importantly, do you think whoever is in government could stop it?
If you consider this, then we can get a sense of why governments and policymakers are so eager to assert their authority now and to appear to be unassailable and omnipotent. I think it’s fear.”
To be clear: I am not advocating an armed rebellion against incumbent governments. I’m observing how decentralization and cryptography have changed the architecture of power and asking what kind of incentives would have to be in place to make what I describe inevitable.
The Bitcoin and the cryptocurrency movements were the second half of the one-two punch that set all this in motion. The Internet freed the flow of information, and in a world where “whosoever controls the monetary system, controls society (Zarlenga)”, cryptos have taken the punch-bowl of monetary control away from the State in a truly Promethean manner, and open-sourced it. Who controls money now? Everybody.
There is a point beyond which the citizenry will stop viewing each other as enemies (left vs right) and start viewing their own governments as the enemy (overlords vs rabble). If that happens, then the incentives and conditions will be in place for #WorldWarWe.
As per the comment from Matt below, I am deeply saddened to learn that Mark Rostenko passed away July 26, 2020. We never met, but I considered him an internet friend and I respected him a lot.
Bitcoin & Bullion Bounce As Bonds Signal Fed Faux-Pas Imminent
Bitcoin & Bullion Bounce As Bonds Signal Fed Faux-Pas Imminent
Policy makers have "generally navigated the economic side of the COVID…
Policy makers have "generally navigated the economic side of the COVID crisis decently well," though they seem to have fallen "behind the curve in the last six months, or so," Rieder said in a Wednesday note.
"It would be greatly disappointing to see the central bank not only not `stick the landing' but in fact stumble in a way that injures the recovery."
Well, judging by today's CPI print, FOMC Minutes, and bond, bullion, and bitcoin market action, they are well on their way to more than a stumble.
A fifth straight month of high consumer price inflation suggests this is anything but transitory and traders are starting to bet that The Fed will have to act sooner rather than later.
The market is now pricing in a 90% chance of a Sept 2022 rate-hike (and a July 2022 end to the taper), followed by another hike becoming more priced-in for Dec 2022...
On the week (with Monday being a holiday), 30Y Yields are down around 12bps (helped by a well-bid auction today) while 2Y yields are up around 5bps...
As the yield curve begins to price in a massive policy error by The Fed (more aggressive rate-hikes not ending well)...
The inflation fears showed up in crypto with bitcoin surging back above $57k...
And gold spiking up to $1800...
Testing and breaking several key technical levels...
As fears of a policy error and flip-flop back to more easing sent the dollar down hard for the day - its worst day since August...
Oil prices were flatish for a change...
Stocks were mixed on the day with Nasdaq the best performer and The Dow the biggest laggard. Things were going so well into the open and then everything puked which reflexively brought in the dip-buyers...
The S&P 500 algos managed to push it back to the 100DMA (again)...
Utes led the S&P sectors today while Financials lagged (after JPM's results)...
Meanwhile, TSLA is in melt-up mode again...
But, The SMART Money ain't buying it...
Finally, U.S. households lack the kind of confidence that usually goes along with higher stock prices, according to Morgan Stanley Wealth Management. The firm drew the conclusion in a report Monday after comparing 12-month changes in the Conference Board’s consumer confidence index and the S&P 500 Index.
“If consumer sentiment doesn’t quickly improve, it could be a signal of market weakness” as people choose to spend less and save more, the firm wrote.
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