Summary of Weekly Market Movements

 Weekly Market Changes for the Past Week from J.P. Morgan

The summary of market movements for this past week are from J.P. Morgan’s site, https://tinyurl.com/y5t7dtff, as McAlvany’s weekly recap of markets was not available this week in observance of Easter. I expect to revert to McAlvany’s service next week. It seems fitting that I should pass along price changes for key financial markets in a section headed “Week in Review.” Not surprisingly, J.P. Morgan doesn’t show the change in the price of gold or silver. They would no doubt rather ship those metals to the moon or ideally some planet much farther away than our moon. They like the counterfeiting scheme they’re licensed to engage in much more than Nature’s money, which if used would require honest capital markets. But that wouldn’t be nearly as much fun or profitable for J.P. Morgan. Anyway, the price of gold fell to $1,276 this past week from $1,295.20 the week before. That hurt our investments greatly. Our Model Portfolio gains slipped to 2.42% gain down from a 4.60% increase year-to-date last Friday. As major banks were busy trashing gold through massive futures sales in the paper gold markets, the S&P 500 continued to hum along, thanks to the kind of endless “free” money creation that J.P. Morgan prefers.

Will justice ever be restored? Technical analyst Michael Oliver thinks so. Yes, there are deceivers in our world, to be sure—like the Judas goat that Christians will remember this weekend in the passion of Christ. Aside from Judas, the great betrayer of Jesus in the Bible, in the world of agriculture, Judas goats are trained and used in general animal herding. The Judas goat is trained to associate with sheep or cattle, leading them to a specific destination. In stockyards, a Judas goat will lead sheep to slaughter, while its own life is spared. But more directly to the concerns of this letter, and on my radio show, Michael suggests the Long Bond can act as a Judas goat. How so?  Under the false assumption that Wall Street cheerleaders want you to believe, rising rates indicate that the economy is strong. And if the economy is strong you must buy stocks because earnings will be on a roll. 

But what if the reason rates are rising has to do with a massive shortfall of savings to fund government spending and the general capital needs of an economy? What if decades of financial repression are finally catching up with government thieves who have licensed central banks to create money out of nothing, to fund chronic and growing deficits? What if massive debts that have grown much faster than GDP negate the ability to allow interest rates to rise such that central banks have no choice but to create endless amounts of money out of thin air, thus leading to confidence in the monetary system that causes even more savers from the private sector to abandon Treasuries?

Of course, that’s a scenario that Wall Street would rather not contemplate. Oliver’s long-term structural and momentum work shows the T-Bond has started a very-long-term bear market and that like a Judas goat it leads the sheep toward the edge of the abyss where equities get slammed down hard. That level then causes a knee-jerk-move back into bonds in yet another counter-trend rally. But with a massive shortage of savings available and with Keynesians not yet able to repeal the natural laws of supply and demand, long-term rates are heading higher, not because of a strong economy but because of a lack of savings. Ultimately as layer upon layer of fiat, debt-based money continues to dig the economy into a greater depression, the existing monetary regime will disintegrate, which of course is the argument for gold. At some point in the future, investment dollars will have no choice but to abandon both main fiat money investments, namely, stocks and bonds, as the integrity of fiat is entirely lost.