Market Update: Comforting Lies

News & Current Events Public News & Current Events
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Last week’s observed bearish engulfing has so far proved a non-event as the markets continue to reach maximum stupid heights lifted by Jerome Powell’s recent soothing remarks to the nation on 60 Minutes.

The trouble is, so much of what Powell said in that interview just isn’t true.

He claimed the US economy was in a great place pre-coronavirus. The claim completely ignores the repo market rescue the Fed has been engaged in since September, in which it has been forced to provide hundreds of $billions to keep overnight repos functioning.

Even more duplicitous, Powell advised against worrying about the massive increase in $trillions of new debt the country is taking on right now. In his words, once covid-19 infections become contained, the country will return to growth and adopt a fiscally prudent program of paying down the debt.

What?? Powell knows first-hand this will never happen. He’s just not being honest with us here.

After all, he took over the reins at the Federal Reserve to preside over the unwinding of the Fed’s balance sheet, which had ballooned from $800 billion in 2008 to $4.4 trillion ten years later. But when he attempted to reduce the Fed’s holdings (aka, quantitative “tightening”), the market threw a hissy fit and Powell quickly capitulated.

He realized that today’s asset prices have become so dependent central bank support that ANY kind of tightening of monetary policy threatens to kill the markets. All he managed to do was shave off a few hundred billion before he was forced to start adding them right back via the Fed’s “not-QE” easing program that began in September.

So Powell really expects us to believe that we'll be able to unwind THIS without collapsing the financial system?

https://fred.stlouisfed.org/graph/graph-landing.php?g=r1Y5&width=670&height=475

The Fed has added nearly $3 Trillion of liquidity since March!! And as Powell said on 60 Minutes, there's likely plenty more coming before this is over...

There are so many reasons to worry about your financial capital right now. If you’re sitting in cash, are you going to watch its purchasing power vaporize as the Fed (and the banking system) creates more $trillions from thin-air? If you’re invested in the markets, are you at risk for losing a substantial chunk of it in the near term if it turns out we are indeed in a bear market rally head-fake and a 50%+ correction ensues?

As we do each week, we’ve once again asked the lead partners at New Harbor Financial, Peak Prosperity’s endorsed financial advisor, to share their latest insights into the road ahead for investors.

In the below video, we dissect Powell’s statements and their impact on the markets, address the ramifications of the rising trade and human rights tensions between the US and China, and talk about potential strategies for those investors either holding either mostly cash or mostly stocks/bonds:

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Anyone interested in scheduling a free consultation and portfolio review with Mike and John can do so by clicking here.

And if you’re one of the many readers brand new to Peak Prosperity over the past few months, we strongly urge you get your financial situation in order in parallel with your ongoing physical coronavirus preparations.

We recommend you do so in partnership with a professional financial advisor who understands the macro risks to the market that we discuss on this website. If you’ve already got one, great.

But if not, consider talking to the team at New Harbor. We’ve set up this ‘free consultation’ relationship with them to help folks exactly like you.

SCHEDULE YOUR FREE CONSULTATION

This is a companion discussion topic for the original entry at https://peakprosperity.com/market-update-comforting-lies/

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And all the data collected will be used to fight/treat honey badger! Really folks, honest!

The Care 19 app will assign random ID numbers and “anonymously cache” people’s locations 24 hours a day. Users will be “encouraged” to divulge the nature of their daily activities, distinguishing work and grocery shopping and “given the opportunity to consent to provide their information”.

Conflicts of Interest

North Dakota Governor Burgum’s relationship with Microsoft founder Bill Gates dates back many years and the billionaire tech entrepreneur was one of Burgum’s biggest donors in his 2016 run for the state’s highest office, contributing over $100,000 to his campaign coffers. In addition, Burgum sold his Fargo-based software company Great Plains Software to Gates in 2001 for $1.1 Billion.
https://www.mintpressnews.com/north-dakota-testing-ground-covid-19-contact-tracing-app/267833/  
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https://www.youtube.com/watch?v=Otm4RusESNU

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For years, I’ve wondered about why we raise our children the way we do.
From the earliest years, we fill them with Santa Claus, the Easter Bunny, the tooth fairy and a host of other fantasies. It’s always seemed to me that we are training our children to be less than effective critical thinkers.
Has anyone else had thoughts along these lines?

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I tried not to say anything, I really did, but it seems so logical to me that I have a hard time understanding how you’ll don’t see what I see.
From - Financial Samurai

Surprisingly though, stock ownership has fallen to only around 52% overall since the financial crisis. This is shocking and unfortunate since the S&P 500 has been marching to new record highs each year. Check out the latest data below. This is the latest data we have for early 2020.
I understand that the demographics here are well-to-do, educated and I suspect predominately white. So it makes sense to have a weekly post catering to that 52% demographic. However, I know for a fact that there are people here who are in the 48% demographic group and they/we do not get adequate representation with respect to our financial challenges. If real wealth is tangible wealth, like a warm sweater a child wears, the wooden toy a husband made, the craft business promoted on Etsy then why is there only weekly emphasis on the FED and what the stock market is doing? I bought into the tagline you guys created and am gullible enough to believe it. “Create a world worth inheriting.” But the actions and offerings sometimes do not reflect that tagline to me. And maybe it was created to just be spin and the sites goal is really to create a good income. I am not sure. My point - a whole bunch of us are not wealthy and your weekly pandering to just one percentage of the readership does not seem fair and probably unintentionally excludes a large portion of your readership. My suggestion - every other week discuss, or have a guest writer discuss the economy and the impacts, changes and expectations for the working class. You know those of us working stiffs who do not own stock and whose financial plan is to survive. Please understand that people want to be in a position to have a financial consultant and invest in the stock market. But, for many, putting food on the table and keeping the lights on is a struggle! AKGrannyWGrit PS - I would appreciate support from anyone in the 48 percentile group.  
 
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[edited]
Hi Lesphelps,
I have to respectfully disagree. In the Netherlands we have Sinterklaas (yep, the Santa Klaus is actually derived from this Dutch tradition). We give presents, write nasty poems, and sing many songs. As of a certain age, but before their 12th birthday, childeren are initiated in this big big lie, and they are told not to spill the beans to younger childeren. Lately there are some issues with some racial sensitive persons, but overall, it is still the most popular festivity. Ok, here is why I disagree. A befriended psychotherapist once made the following statement: this lie teaches childeren not to trust adults, and not to trust men and women with beards telling big impossible stories while wearing dresses, and it confirms their rising suspicions. It doesn’t harm their wellbeing: Dutch childeren rate among the happiest and independent according to Unicef and some other organizations for years on a row (source,source ).Of course it is not a paradise and there are many issues, but Fairytales are not the issue imo.
I think the issue is plain old biology and evolution. There is an evolutionary benefit in being obedient and less critical: disobedient childeren win the Darwin award and cannot procreate. With ever increasing complexity in our society, creativity, independence and critical thinking become more important (see for example this). These are all characteristics of independent thinking. This Ted talk (source) is very interesting because it seems to suggest that independent thinking is “limited” to ~3% of the people.
On the other hand, maybe we should blame our education system:
https://m.youtube.com/watch?v=iG9CE55wbtY
 
 

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“The art of being yourself”, 26 minutes of your life. When I’m in need of a spiritual and i spiration boost, I watch this Tedtalk of Caroline McHugh:
https://m.youtube.com/watch?v=veEQQ-N9xWU
 

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Hi Adam,
Just wanted to say how much I’m enjoying your regular financial updates with New Harbor. You have become very articulate and clear in your presentation style, and I really appreciate your intelligent and sensible approach. Thanks!

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I tried not to say anything, I really did ;^). BUT, Adam and Chris have graced/blessed/gifted all who would take advantage, a wonderful book, PROSPER, for FREE online. Most content in that book will benefit all comers, rich or poor. Really, what more could a person of low financial standing ask for from this outfit? It’s all there! That being said, I will admit that my interest in the “market” is next to zero except for its possible role as a harbinger of future imminent disaster…I’ve even been tempted to petition NPR to stop giving “market” reports on their newcasts, because they just don’t mean sh!t. “Pandering…” What? I do listen to the New Harbor lads, even though I’ll probably never re-enter the “market”, because a person can’t have too much info in these times. But if you don’t have use for that info, simply don’t listen. I hear you Granny, but I think your animus is misdirected. Perhaps you might consider starting a Forum topic on the concerns and topic you feel is being neglected. I’d read it, probably. Hope all is going well up North, and folks are happy getting out. Wishing all a reflective Memorial Day weekend…Aloha, Steve. Old, white, financially secure (?) due to “still” working my ass off…

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I appreciate your comments and think you have some valid points. To be fair to Chris and Adam perhaps our 48% were never the intended audience for this newsletter. I started reading and sometimes subscribing because, I, too, felt something was coming and wanted to be prepared. I certainly have benefitted from reading Prosper and used to love reading the gardening forum, which I miss greatly, and love the Singing Frogs video.
Yes, I understand about rerouting cash to hard assets. That’s assuming you have cash to make the change. I understand how the Fed is walking out on a limb to save the economy…mostly for the well-to-do. I understand peak oil and that we have to seriously consider green energy, but cannot afford to put solar panels on my roof.
I worked hard for almost 50 years and had a pension that got decimated in 2008.
So much for following the American dream.
So at this point I am simply trying to survive, find joy in every day and not eat myself up with worry. I suspect that describes many of the 48%. How many subscribers to Peak Prosperity? Don’t know.
I believe that Chris and Adam are sincere in their writings and their attempts to understand and translate the big dilemmas of our current time. I applaud all that they are doing to secure themselves and how they share that with the rest of us.
Perhaps we need a subset of Peak Prosperity or a newsletter of our own which addresses other values: handmade lives, slowing down to the tempo of life rather than rushing through it to find the gold at the end of the rainbow, gardening as a way to enrich the environment, etc.
Anyway, just wanted you to know your thoughts are appreciated.

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I have benefited from this site. I planted a garden. It has been fun. For years, I have watched videos, watched the crash course more than once and participated in discussions in the forum. Just wish I had the financial resources to participate more.
I agree with you AKGranny. There are alot of us who don’t have the financial resources to benefit from the dealings in the stock market. I did speak with the New Harbor folks. They were kind and informative. But since their minimum investment was $100K (and as they told me, most of their investors had $3+ million) and the fact that I only had 85K liquid, they just weren’t interested in taking me on as a client.

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As a U.K. resident, New Harbor isn’t going to work for me, I guess. Can anyone advise where to turn to in the U.K.? (I could pick a random financial advisor but how can you trust them? If there was a U.K. equivalent of New Harbor, I’d head there).

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…and clearly not a NH possible client. I’m not personally in the ““markets”” (although I’m sure my modest pension is) and I’m not waiting on the sidelines with a stash of cash waiting for the best buying opportunity. Instead, I’m using every bit of time and currency to pay down debt, increase my preps (tangibles and intangibles such as skills and knowledge), expand my garden and preserve even more food, add to my pitifully small “stacks” of physical silver and fractional gold, and help my very small circle of family and friends to do the same.
If I recall correctly, the respondents to the PP/Azurite (?) survey were, indeed predominantly white, higher income (many retired) males. Maybe this is the targeted, preferred demographic of PP. There was more within my analysis of the survey results that suggested to me that, if the survey results were representative of the PP membership, then I’m in the minority on many of the socioeconomic dimensions and some views.
I’m OK with all that, but agree with Granny that there seems to be an imbalance here on the PP site and among the tribe re: content and views that lean heavily towards the already well-off, and less towards those with very modest resources struggling to keep our families financially afloat and healthy, food and supplies in the pantry, lights on, mortgage/rents and bills paid. Many of us with “weaker hands” are trying to stay afloat and not become, by default, some great buying/investment opportunity for those with “stronger hands”. I know, its just business.
Yes, I’ve learned a great deal from Chris, Adam and the talented and insightful PP on-line community. I “arrived” here in 2016 and wish I had come to this knowledge sooner–say maybe 10-15 years earlier when I was a single parent struggling to raise three children (one special needs) working in well-enough paying, professional jobs. Then I believed, and made life decisions both good and bad based on my perception of the false narrative that held that your home is an asset, people need to get a college degree/advance degree to get a good job and that “trusted” institutions and authorities could actually be trusted and were actually in authority, possibly there because of some special knowledge, skill or vision acting for the greater good. Of course, now I know better, see with greater clarity and act with a more focused, effective purpose.
Regardless and for better or worse, my choices today are limited by my decisions and actions made prior based on the best information and resources I had at the time. I own that: no “victim mentality” here, thank you very much. This is the state of affairs for most people who actually have choices or recognize that they actually have choices. (Not going to get into a philosophical debate on this…)
The pandemic and Chris’ YT and other social media have brought a larger, potentially different demographic to PP. This is a great opportunity to reach out and engage this potentially younger, more economically and socially diverse population to the PP website and on-line community. The comments on the YT videos and other social media suggest that many of the commenters are struggling, lower-income, “working stiffs”. Railing against the absurdity and catastrophe of the manipulated ““markets”” and central bank printing of digital currency to the benefit of the elites/1% is enlightening and sometimes cathartic, but it doesn’t change the fact that many struggling people (myself included) are in need of the “stimulus” payments to get us through the immediate, near term and/or fortify for the next wave of pandemic/economic impacts.
But when YTers, social media guests get “here”, they find endless, albeit well-researched and passionate discussion about the efficacy of various coronavirus drugs and treatments, information and guidance of what to do with your financial/investment portfolio and “extra” currency, and (to a much, much lesser extent) some information and suggestions about gardening, food preservation, and raising animals.
I’d like to see greater PP balance, with more information on building resilience through practical steps and suggestions from experienced mentors or accomplished “experts”. The information may well be located elsewhere on the PP site (i.e., through the “Resilience” tab) but it is not searchable by topic/contributor (still the result of the yet-to-be-fixed, very poor PP site search function). There are few feature articles on practical skills, building resilience and even fewer current discussions about those articles.
So yes, I’d like to see greater balance and PP bandwidth that addressed concerns and resources of the “48%” of the woke, struggling and possibly exhausted minority of less well-off PP guests/members. This may well be a decreasing minority as more people visit and/or join, and then leave as they find PP less and less relevant to their interests and needs.

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Yes, Les, my wife and I were thinking exactly along those lines when we had the first of our two children in 1982. We never told them anything about Santa Claus and the Easter Bunny (Etc) because we wanted them to believe us for the rest of their lives when we told them about the birth and resurrection of Jesus, and whatever else we taught them about life. We watched practically no teevee so we thought we insulated them pretty well. But our first born came home at age four one day and ASKED US if WE had ever heard of Santa Claus! ? She got that whole story from a playmate. She knew already very well the difference between reality and make believe so we explained that Jesus was real and Santa Claus was make believe. She said, “That’s what I thought.” She agreed to tell her friend about Jesus but let her find out on her own that Santa Claus wasn’t real. So, how did they turn out? They’re independent critical thinkers, our son bordering on cynical. In fact I sent them both one of Chris’s first videos in January, advising them that they would be wise to pay attention to the virus as it looked like it was going to become a big deal. After watching the video my daughter responded, “So I guess the economic impact is going to be worse than the actual virus.” ? I agreed.
Granny, I sort of agree with you but not really. Think of this whole video series on the Honey Badger Virus that Chris and Adam have exhausted themselves with since late January. I’d say about 93% of the content was relevant and helpful for the bottom 48% you speak for. Then there’s the free Prosper book download which is for everybody. The Crash Course, the signature content of PP, is for everybody. So, what additional content should Chris and Adam provide for people who live paycheck to paycheck? I suggest you do the following: 1) identify content you’ve seen elsewhere that would’ve been good here, 2) provide a list of 5 topics that could be covered here, and 3) list three personalities who could be interviewed here and on what subjects. Where I used to workout at the YMCA they have a pool, yoga classes, childcare and a basketball league that I never use. I’m quite happy with the aerobic machines and weight room. So maybe you could be happy with the excellent content and conversations you find here, and learn to supplement them with valuable content elsewhere. That’s what I do. I have other sites where I can learn about and discuss things like armed self defense, civil war 2.0, politics and whatnot that aren’t covered here at PP. It’s like what they tell people in Alcoholics Anonymous and Narcotics Anonymous, “Take what you need and leave the rest.”

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I am new to the enrolled members list but have been watching for two months.
It was time to participate, not just watch.
Dr. Martenson, and Mr. Taggart, my hat is off to you, Sirs.
You show integrity in everything you have done so far that I have seen.
The world sure needs more of it, and I deeply respect you for what you
have done, and what you are doing and your courage in doing it.
I live in a third-world country whose haphazard response to the pandemic
has produced economic damage beyond belief, power-grabs, shortages,
and (sadly) even abuse of people by authorities.
I’m planning to use what little influence I have here to open some local eyes,
and engage some local brains. The situation here is hopeless, but not serious
at least so far. (as Pogo might have said).
Thanks to you, and also to your supporters.
I have found a place I belong.
Chuck

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Granny -
You bring up this critique every time we post the weekly market update.
I’m going to repeat what I posted last week:

I agree with you that more exploration of covid-19's impact on Main Street would be appreciated here on the site. But let me offer a little context as well as an invitation: In the just past week, Chris and I have recorded/published interviews with Sergey Young (technology's promise & risks), Neil Howe (the 4th turning), Grant Williams/Mike Maloney & Charles Hugh Smith (the Fed), five daily coronavirus update videos, and the video above with New Harbor (markets). Then there are the irons in the fire...more interviews on energy, the adjustment reaction, food resilience, etc...plus our regular writing and daily videos. My point here is to say we are *still* running at the redline producing as much relevant content as we can, every day, 100+ days after publishing our first alert on the coronavirus. And yet there are many issues that deserve more attention than we have the bandwidth to cover. That said, I wouldn't say we're "silent" on the implications for Main Street. Chris' daily videos updates are geared to focus on the health and economic ramifications that the everyday household needs to be preparing for. And I recorded an interview with Chris, John Rubino and Charles Hugh Smith last month on the topic of "What comes next?", which was entirely focused on how life in general will change for the masses. So, if you'd like to see more exploration of a topic on this site than we two humans have bandwidth to offer, Chris and I would welcome it gladly if you'd take up your own challenge and start a Forum discussion on it. That's exactly what the Forums are there for. In short: you have a great idea and we're encouraging you to run with it!
We're receiving a lot of positive kudos for these weekly update videos. The past three videos have received ~250,000 views on YouTube alone -- so there is clearly a sizeable audience that enjoys them. As long as that remains the case, they're not going to stop anytime soon. So instead of cursing the darkness, I invite you to light a candle and start a Forum thread on the topic(s) that interest you most. And if you choose not to... then I encourage you to follow the good advice that thatchmo, thc0655, and others have suggested here. Chris and I are going to continue to focus our time & talents on producing the highest quality content we can across as many relevant subjects as we're able to. There will hopefully be many that interest you, and some (like these videos with New Harbor, clearly) that won't. "Simply take what you need and leave the rest".
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Thank you for your responses. I appreciate that many of you took the time to respond and share your personal thoughts and story!
Today I heard that the unemployment rate could be 30% by June. Holy cow that is greater than the Great Depression. From my perspective thats a subject that warrants discussion. I do realize that may not a major concern for many here but I think it will be a far more important contributing factor to our future than the virus was. I was just suggesting that every other week the financial report and podcast could put emphasis on the working class. But since that was not a warmly received suggestion then I will move on and see this as an opportunity to fulfill a need myself that is not being met.
I too agree the videos are beneficial, giving away the book is generous and have gotten great value from the site over almost 10 years.
So with the quote “be the change you want to see” I will be off on a new adventure. But that does not me I won’t be lurking and commenting here.
AKGrannyWGrit

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I’ve been poor nearly all my life. During a relatively more prosperous period, my husband and I had a bi-coastal marriage while he was working in MA and I was in WA while our daughters finished high school. Our older daughter was going to be valedictorian of her class–definitely not the time to move her–and so, algebra dictated that I spent an additional year in WA so our younger daughter could graduate there. (You know, what you do to one side you must do to the other…)
Keeping two households going took a good share of our prosperity. But, we always knew that ours was a voluntary poverty, so I never felt really poor. When our kids were younger and I had to be around some of the snooty townspeople for school programs, I just wore my jeans and flannel shirts and my Grandma’s pearls.
Getting to the point of this post–even though I have not had the money to invest, I have found it valuable to know what is going on in that artificial world, since it will probably affect me and mine and usually not in a good way. My older son was born in 1971–yeah, I’m an old lady-- and it was clear to me at that time that real wealth was something that royalty and peasants have always known; land to grow food, a sturdy shelter, friends and allies, and a few tangible assets to trade if ever the SHTF or you needed ransom gold. The middle class seemed too dependent on the favor of others. Too many times in history, princes and paupers both have been cast into the cold with only what they could carry, plus, most important, the knowledge they have accumulated. Guarantees aren’t worth the breath it takes to speak them. I have been prepared for something like this all my adult life.
Certainly not to say life has been full of pessimism. The Dalai Lama says the purpose of life is to be happy.
When I found Chris’ site, I felt I had found a kindred mind. At the very least, I have been interested enough to follow his progress through the years.
I, too, felt a disturbance in the Force?? last summer, fall and winter. When the Alert was sounded, it was with almost a sense of relief that someone else realized the Wuhan shutdown was extremely serious and it was time to get real about the future.
I, for one, am very glad that Chris has had the wherewithal to be able to devote his time and intelligence to research this pandemic. Do I wish I were a bit richer? Well, sure, but I’ve spent my time gaining knowledge and experience and having adventures. There has always been enough. I have most of the tools I need. Do wish I had a well…
I don’t think I’m one of the 48%. No, I’ve never been one of the crowd. But, I do feel I found my tribe with this group. I don’t expect to find the answers to all questions here, besides, we already know it is 42, but I do value the insight and ideas I find here.
 

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I’m more concerned that they believe preachers rather than scientists.They get beyond Santa and the bunny before junior high, but the religious stuff doesn’t die.

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People’s religious beliefs are about as flexible as their politics. Good topics to leave alone.
Science is another matter. Have you noticed that government and corporate funding of science has virtually destroyed that field? And, I’m not even referring to government funded science producing pandemic level pathogens.
Funding determines what scientists will focus on and, to some extent, what their research will reveal.
I’m not nearly as enamored with science as I once was.

Science advances one funeral at a time. - Max Planck